The V-2 rocket was the second of Germany's 'Retaliation weapons' to be deployed in World War II, the first being the V-1. The V-weapons were used chiefly as terror weapons against large cities such as London. The V-2 was the world's first modern ballistic missile.
V-1's were basically flying bombs. Powered by a simple pulse-jet, and guided by a gyroscope, the V-1 was launched from a steam ramp, and flew until it ran out of fuel. The distinctive sputtering sound of it's engine ceased, everyone ducked, and then it exploded when it crashed.
The V-2 followed a more parabolic trajectory, and there was no warning of their approach, as they fell faster than the speed of sound.1
The V-2 was the end result of more than ten years of work by a team of rocket scientists lead by Wernher Von Braun, who began working for the German Army in 1932. In 1934, a prototype rocket named the A2 was launched with 16,000 newtons of thrust.
A new rocket, codenamed 'A4', was launched on July 6, 1942. The A4 weighed twelve tons, could generate 250,000 newtons of thrust and could carry a one ton payload three hundred kilometres (200 miles). However, the first test rocket barely cleared the clouds before landing in the sea half a mile away. The third A4 was launched on October 3 1942. It followed the programmed trajectory and landed on target 192 kilometres (120 miles) away.
Production of the A4 (now dubbed Vergeltungswaffe Zwei, ''Retaliation Weapon Two'') began in 1943 and the first of these fell on London in September 1944. London was a large enough target for V-2, which lacked a precise guidance mechanism.
Unlike the V-1's, which flew at a set altitude in a straight line, the V-2's were impossible to intercept - their trajectory took them to the edge of the earth's atmosphere before they began their descent, at a speed faster than any airplane in existence at the time.
Bombing the launch sites was also problematic. Whereas the V-1 launchers were scattered across French countryside (in order to reach London), and were stationary, the V-2 launchers were mobile, and could be moved further inland. The attacks only stopped once the German Army was pushed back beyond the range of the V-2. It was then used on other cities in Europe. However, the V-2 came too late to affect the course of the war.
Many of the rocket scientists under Von Braun defected to the USA before the end of the war. They were relocated to the White Sands Missile range in New Mexico. There, they continued to work on their rocketry. By the early 1950's, V-2's modified to carry scientific equipment produced the first motion pictures showing the curvature of the Earth. Von Braun went on to work on America's space program.
1: Which is different from falling silently. Thanks to Spuunbenda.
Sources:
http://www.cdscc.nasa.gov/csc/exhibits/rocket.htm
http://www.nasm.edu/nasm/dsh/artifacts/RM-V2.htm
http://www-istp.gsfc.nasa.gov/stargaze/