I went from 996.2 GT3 to 997.2 GT3 (5.5 years in the 996 and almost 6 so far in the 997, so long term rather than chopping and changing). I don't feel an urge to go back as such, but I do miss the older car and if it were sensible for me to have one of each I probably would...
The short version is that the 997.2 is a much better road car - especially in more or less unmodified form.
The first topic is of course the engine and there is context here as the 3.6 in the 997.1 is much more like the 996 than the later 3.8 in the gen 2. The 3.8 has a much smoother torque curve and (particularly with the sport button on) pulls much better out of the low to mid range. On the road that makes it much more enjoyable to drive in normal use as well as when pressing on (as opposed to when going loud, as once you reach the upper part of the rev range they then become very similar). On track or winding roads that translates most to not requiring 3-2 downshifts where the spikier 3.6 really does call for them. You still can if you feel like it of course, but there isn't the need to kick it down the extra cog to avoid falling off of the higher cam profile.
Next it is probably worth a quick mention to the diff. The 996 diff is actually rather more aggressive, which on track is good but on the road - well - lets just say that it tries harder to stall the car when you reverse around corners or manoeuvre in carparks and generally makes things a little more cumbersome at low speeds. On a 997.1 this is a weakness readily felt when powering out of corners and putting the same lockup spec diff as the 996 into them is thus fairly common (either with the cup car parts or aftermarket from someone like guard). Less noticeable on the 997.2 in road driving with the PSM on, but while PSM is not a problem on the road you really do have to turn it and the traction off on track or it sort of works against you (particularly if you really attack your trail braking I found that it utterly obliterates the rear brakes. Hitting the off button and managing the weight transfer yourself as you would in a 996 is both more satisfying and better for your consumable costs).
As for the PASM dampers - they are better on the road for normal use, but they certainly aren't perfect and while better than the stock passive Bilsteins on a 996 : it is understandable why a fair few people bin them for a better passive setup or fit an aftermarket suspension control unit. Occasionally when going very quick they do feel like they have ran out of ideas and aren't doing what they should (which I've encountered in particular at Zandvoort and the 'ring). You can of course drive around those margin cases but there is an instinctive desire to be on a passive 996 at the time.
For handling in general you have to remember that if you are prepared to modify the suspension you can make any GT3 handle pretty much the same, however out of the box the 997.2 has much better turn in, feels like it has more mechanical grip all around and is more stable under heavy braking. Earlier cars (especially the 996) default to loads of understeer and are a bit wayward if you stand them on the nose, which is why everyone who buys one always ends up sending it to a decent geo shop and then raving about transformation. You don't have to do that with the 997.2 until you are doing track speeds (though that said, if you put a road friendly track geo on it like mine has then the mechanical grip is hilarious for road driving, particularly the turn in. You need to swap out suspension components to make a 996 similar).
Small honourable mention to the 997.2 having tyre pressure monitoring as standard. Handy on track, but also on the road. I once had a slow leak that without TPMS would have seen me having to bin a tyre - it is worth having. Not standard on the 997.1 though (it was optional, rarely selected and would need loom modifications to retrofit so not really viable).
Interior. 996 is primitive but in a charming and involving way and I wouldn't argue with anyone who said that they preferred it (especially with the centre console delete - the optional console in a 996 is a tiny bit intrusive if you are anywhere above average height). However, the 997 has better ergonomics and the PCM system in the 997.2 is worth having (even the most recent maps are a bit out of date now, but the nav is viable and the hands free bluetooth phone integration decent enough and the iPod/USB music integration is very nice on a long continent crushing drive). Seats? The 996 buckets are the best, but only by a small margin from the 997.2 folding buckets. The fixed buckets in the 997.1 (which could also be had on the 997.2 as an option) are narrow (not just the base, but also the shoulders) and fit far fewer people comfortably.
That'll do for a start I think... :thumb: