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As a follow-on to abhi's comments, I keep about 80 books on my Kindle 1, Even if I were able to load all the tech. documents i use at work, I'm not sure I'd use the 1.4G available in the Kindle 2. (as an aside, all of the books I currently have, including the folders they're in are only 61mb, that doesn't even fill up the onboard memory of the Kindle 1!)
I can say quite honestly that I can't wait to get my hands on my own Kindle 2!
1) Battery - the new Kindle 2 has a battery that lasts 25% longer. However it's probably not replaceable.
What that means is you cannot carry an extra kindle battery with you to use in case your current battery runs out.
2) No SD card.
What this means is that you cannot use 2GB, 4 GB, and 8 GB SD cards. The Kindle now comes with 2GB of in-built memory (enough for 1500 books).
This is an issue if you'd like to carry a lot of your documents with you, and/or store a large collection of electronic books with you.
Overall, I feel that it's ok to have the Kindle 2 as a first time buyer. The screen is much better, The problem with the buttons for next page being accidentally pressed in kindle 1 are gone. and the screen is supposed to refresh quicker.
My recommendation to you would be to figure out whether
1) you're ok with not being able to replace batteries if they suddenly run out - for me, it's not a big deal.
2) being limited to 2 GB of memory - if you don't need to store a lot of documents, it's not a problem.
The reason these are bothering a lot of people is that these are ways in which Kindle 2 is inferior to Kindle 1.
Overall, I'd say Kindle 2 is the better option because it has newer screen technology and better usability.
feel free to ask me follow-on questions.