Most experts seem to agree that for type 2 diabetes, metformin should be the first line therapy for most patients, but there is significant disagreement for which agent holds the #2 spot. Recently, the NY Times wrote a piece "For Those With Diabetes, Older Drugs Are Often Best." claiming that docs should stick with the older, cheaper drugs. This may be true for metformin, but likely not for sulfonylureas which cause hypoglycemia, weight gain and do not sustain glycemic control. This means the next agent will need to be a branded drug. DPP4's likely Januvia and Onglyza and TZD's like Actos are but possibilities, and each has advantages and disadvantages over the other. The DPP4's are the newest agents and therefore have the shortest track record. We don't know whether they can sustain glycemic control, but 2 year data looks promising. However, they are very clean with essentially no side effects. The TZD's have been the best studied, and really the only drugs that have shown sustained glycemic control. However, they have more side effects including edema, weight gain, a very small risk of non-vertebral fractures, a very small risk of heart failure in those at risk, and of course the FDA's concern about myocardial ischemia with Avandia (though not a concern with Actos per the FDA). Both classes also come in combination with metformin.
For a more complete discussion, see my Medscape blog post "Metformin is first, but what diabetes medicine should be your second choice?" (You will need to create a log in and password for Medscape in order to see this).