I currently use PSE 2. When I started trying to learn PSE with a version that came with some other software, I bought the PSE Elements WOW book. It came with a CD, and I ***umed it would work with the version I had, but it didn't. So I upgraded to PSE 2. I got a $30 rebate so the price wasn't too bad. Since I was just starting to learn when I switched, I can't tell you exactly what all the differences are. But as I remember there weren't as many options available for the different commands with version 1. I don't know if everything just started to click but I seemed to make more progress when I got 2. Does this make sense?
I've downloaded a lot of brushes and styles from the internet that were made for Photoshop versions 6 and up and have been able to use most with PSE 2. Don't know if they would work with 1.
What program are you currently using? I had done a little with DIP. It's easier in many ways but I could see that I had more possibilities with PSE. I'm still still a beginner but I'm amazed at all the program does.
Hope this helps.

Carole