The second generation has an added volume rocker and a built-in speaker, which were previously iPhone-only features. The second generation also comes with the chrome frame seen on the iPhone 3G, making the two almost identical when viewed from the front, with the only differences being no speaker above the screen, no silent/ringer switch and the sleep/wake button on the other side.
The first generatin iPod Touch sale for just $199 and the second generation iPod Touch sale for just $219 for the 8GB. I honestly think you should get the second generation. Some first generation iPod Touch's don't come installed with the 2.0 Software Update which is for the App Store and cost just about $10 to upgrade. So you might as well just go with the second generation!