I've had both, an '05 and now an '08.
The only Gen 2 I would avoid would be an early '07 if you want a sliding rear window.
Ride and handling on a Gen 2 is so vastly superior that it isn't funny. So all that discussion about needing new shocks and swaybars like Gen 1 you can forget about.
I love steering wheel controls for the radio and the Aux input jack in the console.
True, you can't lift it and it's not as off-roady as a Gen 1. Also there is no limited-slip available and you have traction and stability control instead, which I don't care for. I am told you can get a 2004 Explorer rear limited-slip and install it, which I may do if I buy mine when it goes off lease ('cause like, I can't get a new one). I pretty much don't have the time or inclination to off-road anymore anyway, but if you need a Trac-type rig for towing or getting around in bad weather like I do, it's ideal.
You can get a Gen 2 fuel tank skidplate from Ford because it was a fleet option.
Storage compartments in the bed floor are sweet.
I don't care what side the fuel filler is on.
For whatever reason, the bed is slicker and marks easier than a Gen 1. I finally broke down and got a bed mat this year.
Mine came with 245/65-17 Goodyear all-seasons that were worthless in snow. When they wore out I got Firestone Destination A/T's in the same size. It's kind of an oddball size but a number of tires are made in 245/70-17 that would be a smidge taller and fill the fenders more. You will find Gen 2's with 16", 17", or 18" rims, depending. Adrenalins might have 20's I think.
I think cloth seats only came in tan and they will get dirty just looking at them. I put flannel seat covers on mine.
I've rocked mine straight through from Pittsburgh to Ft. Myers, FL twice, loaded with people, luggage, camping crap, and golf clubs on the roof rack and it doesn't break a sweat.