Good news is that it came in SW of NO, LA. As a category 2 storm. Not all levees have been rebuilt, those that have should withstand a category 2. Perhaps leaking at points.
According to news reports, Katrina brought storm surge of 27 feet, Gustav is bringing as much as 14 feet, but for the most part 8 feet above normal. Waves are overtopping in some areas, wonder if that's rebuilt levees or unrepaired levees ? Hopefully what they've repaired holds up, but also Gustav will give them a good indication of what really needs improvement. To say a category 2 is fortunate, for NO it has to be. According to weather experts, Gustav came at a softer angle as it hit.
For New Orleans, I wouldn't take this as a false sense of security for future storms, the levee system is a patchwork of repair and has withstood this/a softer storm. And it's a good thing this isn't a catastrophic storm that would've wiped out the progress of rebuilding since Katrina.