As far as 'looks', I like the first gen. As far as shootin', second gen all the way.
I bought my first gen NIB and it was never really reliable nor could I make it reliable. I finally sent it back to Kel Tec and they built me a new, second gen on my first gen frame. Nary a single hiccup since I got it back.
My wife had a first gen P32. It also proved unreliable. Sent it back to Kel Tec and they replaced it with a brand new second gen P32 stamped with her old serial number. Nary a single hiccup or issue since she got it back.
Plenty of folks report no issues with their first gen guns. Also, I realize that two guns certainly do not establish a clear 'trend' or 'pattern'. Still, as those are the examples of each with which I have personal experience, they are enough to bias me toward the second gen P3AT and P32.
I also think that the flat-topped slide (which is part of what makes the second gen a little less visually appealing, to me, vs. the first gen) makes using the minuscule sights easier. Therefore, I can shoot the second gen just a little bit more accurately than I could shoot my first gen.
I've got 2 first gens, 1 was one of the first 50 offered to the public (bought used, first owner said he only a a few malf in the first 50 rnds), and a H464x. both have been flawless when I shoot them. Both have 'flyers ramp mod'. I had a second gen for a short time, it ran 100 perfectly before I gave it as a gift. I bought it when they first came out just so I could compare the two. I love the first gen, lighter, sexier, and most importantly the sights. Yes, I said I like the sights on the first gen better. I align the top of the angled slide to aim the pistol, and the few times I shoot at 25yds I do ok using the actual sights. My method is more accurate for me on this platform, and the second gen didn't do it for me... in 100 rnds anyways.
Good luck on which ever one you decide on, I'm sure you'll be pleased.
I have a first gen. It has been flawless from day one. Maybe I've just been lucky. but it is my primary carry weapon here in sunny Florida, because I live in shorts and a tee shirt and it's all I can conceal on a day to day basis. I don't know anything about the gen two pistols but I'm sure they are as good, if not better, although I can't figure out how my gen one is lacking. Just my opinion.