I've played both, and I also prefer the first one. DK2 wasn't a bad game by any stretch, but it was... You know, it's damned hard to put my finger on exactly what was wrong with it. One thing I found annoying was the change in graphical style. While DK1 used sprite-based units, DK2 went full 3D at a time when that meant very low-poly models. In effect this meant that rather than get prettier, units actually got uglier in the second game (this is my personal opinion, you understand). For instance, look at
this DK2 screenshot from Mobygames. Looks like crap, right? Compare it to
this screenshot of DK1. Granted, that also looks like crap (but then I never used the first person perspective in DK1 if I could help it), but that's because the sprite is in such a low resolution. If they'd gone for hi-res sprites rather than 3D in DK2, I think the result would have been better.
That said, DK2 was mostly more of the same, compared to DK1. There were some new rooms and units, but otherwise it was pretty much the same game. This may sound like critique, but I actually think that is exactly as it should be. However, it does mean that DK2 was much less memorable than DK1 (as sequels often are), simply because it did not bring about the total innovation in gameplay that the first one did. In an imaginary world where DK1 was never made and DK2 was the only Dungeon Keeper game, I think it would have been just as popular as the first one was in reality.
Widukind: Overall, it's kinda hard to point out why Dungeon Keeper 1 is better than it's successor and I'm sure there are some people who would argue otherwise, but for me the original just feels and plays better.
Exactly. It's almost impossible to say why DK1 is better than DK2, it just is. I did try to give an explanation of sorts above, though.