The differences in usage are small.
The HDR2 has a different startup screen, slightly different use of control.
The software has been updated and can be updated without changing hardware. Only a serial cable is enough.
You can add a recording up to 8 different groups.
The HDR1 couldn't handle the record record function when it was used with a MX(8000). The HDR1 locks up and the only way was to take off the power. The HDR2 will work with the MX.
The 250 GB harddrive will be able to record 60 hours instead of 17 hours.
Technically are both devices identical. All the boards are the same.
So, in mine opinon, if the looks doesn't interests you, buy the upgrade and you'll have (almost) the same.