Lee, my friend. Take a seat...I was in the same dilemma for around the last year. I got my '86 S2 back in 1998 & have spent a fair size of money on it, but wanted a newer one. Looked round for ages & never saw one that was right. Never thought of really owning a S1 because I prefer the interior styling of the S2: more modern & can modify most of it, which i had done, and was going to put my modified bits in to the newer spec'd car. Couldn't find one which said "This is the one", as they all needed bodywork, so started looking at some S1's. (Funnily enough, no-one seems to sell their restored S2's) Saw some of the 'it's mint' S1's which were far from that condition..but was still torn between the original hardcore, nuff respect S1 but modify it & be beaten...or keep an eye out for a tidy bodyworked S2 to put my modified goodies on.

Then spotted a D plate S1 up for sale as the owner wanted the one & only Grey S1..but someone beat him to it & it was taken off the market..only for it to come back on around a month later. Two viewings later, it was mine. Was still considering if I actually wanted a S1 over a S2 up to the point I knocked on his door again to close the deal.
I've had the car for around 2 months now & done 180 miles..and everytime I've been out in it, I've had people saying how good it was, from my mates, to the tyre man yesterday ("Now that's a proper car") down to a local RSOC bloke who waited in his van in the rain for me to come back from the shop to try to get me to join RSOC.

As for the modified parts? All the shiny bits have been fitted to the S1 (same engine bay basically). Performance goodies like turbo timer & boost gauge are being fitted to the S1 as they won't look out of place and do an important function. Interior goodies, mostly being fitted..inc steering wheel change (please don't hit me). Am also going to trial my painted wheels to see how it looks (keeping the originals..obviously). The only thing which isn't going on the S1 is my leather interior which wouldn't look right, and the samco's as they are different shapes.

So Lee...if you can afford it, go for the S1. Performance wise, you can do the same things with both of them. Looks wise, the S1 gets more of it in standard trim.
It's like Matt said, for the money & your head, get a good S2...but for your heart (& a little extra money if you can) get a S1.

Good luck with whatever you choose..if you can decide.