Photosynth 1 is a 32-bit application (so it can only use a maximum of 4 gigabytes of RAM to work with the photos, but you can synth together as many photos as you have RAM installed for - usually maxing out around 2,000 photos if you have a 64 bit computer, 64 bit copy of Windows, and more than 4 gigabytes of RAM installed.
Photosynth 2 only synths together 200 photos at a time.
Photosynth 1 allows each input JPG to be a maximum of 32 megabytes.
Photosynth 2 allows each input JPG to be a maximum of 20 megabytes.
Photosynth 1 checked to see if an exact copy of a photo had been uploaded to the website previously, and would skip uploading it again if it was already on the website.
Photosynth 2 makes you upload all of the photos each time, even if you've already uploaded them before.