As a nanny of 15yrs and a mother to a 3yr...there is NO such thing as terrible 2s. Children at this stage in life are finding themselves. Learning their personalities, testing their boundaries and finding their voice.
Allow them to do so. Along the way, teach them the proper way to speak to an adult or other children. Teach them hitting isn't appropriate, as well as kicking, biting or pinching. This is a stage in their development. Its our responsibility as a parent to guide them along the right path, in hopes our efforts continue on til their older (i.e. manners, respect, no hitting, etc).
My son was the most polite and respectful 2yr old. Everyone use to praise him and comment on it. In January 2012 he was enrolled in school. He has become a very rude kid and lost most of his manners. They learn by example. Therefore I have to be on him that much harder in reminding him of his manners and how to treat others.
What I do with my son when he acts out, gets rude to his grandparents or his uncle, I correct his behavior and tell him that is not acceptable and he is being rude. Tell him the best way to act is to say hi, be polite and talk nicely. If he comes off rude, I say "its that how we ask, or is that how we say that?" Then I will ask him to repeat what he said in a polite respectful manner. Then praise him for his attempt and explain to him that is a much better attitude and response. That makes mommy happy!
Your sons behavior is typical for this age and its part of his development for this stage in his life. Be patient and guide him to be a polite and respectful kid. With hard work and persistance, he will be that polite child again. My son is starting to come around again. But remember, EVERYONE needs to jump on board and aide you in correcting his behavior. They know who they can push the buttons harder then others, the little stinkers.
Good luck and give him lots of loves!