Different games are different.
Both are good. Pacing is better in the first, while the second is far more true to the novels. The first has amazing graphics given the engine they were using, and the second has amazing graphics in general. The first has combat everyone complained about, the second also has combat everyone complained about. The first had more sex presented in a less believable way, and the second had less sex presented in a more believable way.
Does one really have to be better than the other? I'd say it's a tie.
I'm leaning a little more towards the second, particularly because I actually stuck with it until the end, and then proceeded to replay it after. I never could bring myself to finish the first. But on paper, TW1 seems like a better game, especially for the old school CRPG crowd. It's a tough decision, since they both have their own strengths and weaknesses.