There is one advantage for an SC-1.
It has the ability to be powered directly from the 3 wire connection from a Lionel O Gauge switch machine. If you supply power to the switch machine with the constant voltage plug, this can be helpful in terms of lessening the amount of wires.
The SC-2 can't do that. Other than that though, the benefit John mentions probably trumps this.
-Dave
I believe this to be inaccurate. As long as a fixed voltage powered switch is connected to the first position, the SC-2 is just like the SC-1.
Ok. I forced myself to go re-read the manual, seems you are right, I don't remember where I had that idea from. I'll modify my original post to remove the wrong info.
It's been a while since I had my layout hooked up like this, but I remember having 4 switches and 4 SC-1s that were very close to the switches. I might have had a mix of accessories that was not compatible with the "modes" the the SC-2 has defined in the first few pages of the manual.
Sorry.
-Dave