Disc 1 is better.
Disc 2 is NOT in "full frame". It is horribly zoomed in & because of this you lose some of the picture on both sides. Also the picture quality on this disc is very bad.
The theatrical version on Disc 1 is in much better picture quality and in full cinematic Widescreen so you see the whole picture. Also it is uncensored so you get the uncut limousine talk as well as Elvis' comments about the "thin chick" during the On Tour section.
I have always hated the Disc 2 extended version because of the way they dubbed over Elvis' voice to censor his comments. I would rather hear Elvis say what he said instead of listening to that Ral Donner overdub about the girl "waking the dead".
The Theatrical Disc 1 is the only version I watch as I want to see it particularly for the opening Graceland footage in beautiful picture quality and full widescreen!
DISC 1 Theatrical Version- Full Widescreen and good picture quality:
DISC 2 Censored TV version- Zoomed & cropped- inferior picture quality:
See the difference in picture quality? And see how much of the picture you lose on Disc 2.