I prefer IWD2, personally, but I've made a lot of modifications to it. In particular, I greatly reduced the effect of the XP decrease for lower-level monsters, because at higher levels, the bad guys can still put a WORLD of hurt on you, and they'll spawn in groups of 10+, but you get almost zero XP for what is definitely NOT a "trivial encounter."
For me, 1 has the advantage of a neat story and a better HoW hardmode, but the game mechanics for 1 are just meh. And a large amount of the first section of the game feels like the classic "Level One Adventure" where a single goblin archer can kill your entire party if you're unlucky. AD&D is best balanced in the lvl 6-15 range, which shows a lot more in the first game.
I like them both, but for me, 2 has much higher replay value.