In this paper we study the hyponormality and subnormality of 2-variable weighted shifts using the Schur product techniques in matrices. As applications, we generalize the result in [R. Curto, J. Yoon, Jointly hyponormal pairs of subnormal operators need not be jointly subnormal, Trans. Amer. Math. Soc. 358 (2006) 5135-5159, Theorem 5.2] and give a non-trivial, large class satisfying the Curto-Muhly-Xia conjecture [R. Curto, P. Muhly, J. Xia, Hyponormal pairs of commuting operators, Oper. Theory Adv. Appl. 35 (1988) 1-22] for 2-variable weighted shifts. Further, we give a complete characterization of hyponormality and subnormality in the class of flat, contractive, 2-variable weighted shifts T ≡ (T 1 , T 2 ) with the condition that the norm of the 0th horizontal 1-variable weighted shift of T is a given constant.