System Shock 2 does the horror better and perhaps the atmosphere as well (although the two differ in atmosphere "type" pretty heavily). The addition of stats is cool too. But System Shock 1 is just overall a better game when it comes to gameplay. The shootan is better, the guns are cooler and there are roller skates. Harder, too. I also love how juggling all the implants, abilities and shit like rear-view cameras makes you feel like a legit cyborg, probably the only game that ever managed to do it, too.
I also absolutely loved the original (non-mouselook) control scheme of SS1. It reinforces the cyborg feel so very well. In fact, the interface in general is an extremely impressive work from a technical and ergonomic viewpoint even today. There's a shitton of features there, shitton of different movement types, etc, but the way it's all set up across the keyboard and screen is really logical and convenient. At first it looks overwhelming as fuck but, to me, it was very easy to get used to it fast. Everyone who disagrees is a faggot and needs to L2P
Not to mention, SS1 doesn't fall apart completely at the end.