  $^7$Li and $^{29}$Si NMR, $\mu$SR and magnetization measurements in
Li$_2$V$_{1-x}$OTi$_x$SiO$_4$, for $0 \leq x \leq 0.2$, are presented. The
$x=0$ compound is a prototype of frustrated two-dimensional Heisenberg
antiferromagnet on a square-lattice with competing nearest ($J_1$) and
next-nearest ($J_2$) neighbour exchange interactions. Ti$^{4+}$ (S=0) for
V$^{4+}$ (S=1/2) substitution yields the spin dilution of the antiferromagnetic
layers. The analysis of the magnetization and of the nuclear spin-lattice
relaxation rate shows that spin dilution not only reduces the spin-stiffness by
a factor $\simeq (1-x)^2$, but also causes the decrease of the effective ratio
$J_2(x)/J_1(x)$. Moreover, the sublattice magnetization curves derived from
zero-field $\mu$SR measurements in the collinear phase point out that, at
variance with non-frustrated two-dimensional Heisenberg antiferromagnets, spin
dilution affects the low-temperature staggered magnetization only to a minor
extent. This observation is supported also by the $x$ dependence of the
collinear ordering temperature. The results obtained for the Ti doped samples
are discussed in the light of the results previously obtained in the pure $x=0$
compound and in non-frustrated two-dimensional Heisenberg antiferromagnets with
spin-dilution.
