I bought a 1st gen. iPad when they first came out and after using it for a year, gave it to my mom when I bought my iPad 2.
I was perfectly happy with my iPad 1, but my mom didn't have any home internet access, and by giving her my iPad 1 with 3G, also gives her limited internet access for only $15/month.
The camera in the iPad 2 is crap, about the same, if not the same, as the camera in the iPod Touch. The iPhone has a much better camera, and so does my cell phone. I won't be using my iPad 2 to take pics, and have zero interest in facetime.
Is the iPad 2's duo core processor faster? I haven't noticed any true increase in speed, so I really couldn't confirm that.
Smart covers don't fit the ipad 1, but I personally don't care for them because I don't feel they offer any protective cushioning against screen breakage in the event of droppage.
Unless you really have a strong preference for white, those are the only real differences. Everything else is pretty much exactly the same.
So to me personally, I don't see any significant advantage to buying the iPad 2 over the iPad 1 and if you shop around a little, you may be able to save even more than $150.
I saved $350 on my iPad 2 off the retail price by buying it off craigslist, and it was new in the box, but I don't really advise going that route because the overwhelming majority of the iPads 2 listed on craigslist are scams.
But buying an iPad 1 on craigslist is considerably safer because many people genuinely are looking to sell their year old first gen., so they can upgrade to the iPad 2. You should still exercise caution though.
The one potential issue with buying used however is questions about the battery life. Installing a new battery requires opening up the iPad completely, and that's no easy task, and might cost even more than the savings of buying used. IPads also haven't been out long enough to determine the average battery life, so you may wish to consider that as well.