Well, the original Kindle doesn't hold as many books - but it does come with an SD slot. It also has a user replaceable battery. Many people didn't like the button design of the original Kindle, they found themselves accidentally turning pages.
The 2nd Generation has Text to Speech capability (Publishers sometimes turn that off on certain books), it holds more books, and the layout was improved.
I'm a huge fan of refurbished electronics. I've considered buying an original Kindle (refurb) for my High School son just for the price. He reads, but he doesn't read constantly like other family members so that model would probably be good for him. He's not going to want to hold 1000+ books on his Kindle anyway.
However, if I decided to go with the 2nd generation for him I wouldn't buy a refurbished. I'd spend the extra $40 and get a new one so I would be certain that battery is new.
I'll also say Kindle refurbs seem to kind of risky. YOu often see people on various message boards who have had to return 2 or 3 Kindle refurbs until they get one that isn't defective. That is another thing that has made me a little cautious.
