I haven't tried playing the Underworld games in quite a while, and one of the reasons is the control scheme. Having J as the jump button is a really retarded design decision when you think about it, and 1, 2 and 3 as the "look around" buttons even more so.
UUW1 was my first Ultima game, and it introduced me nicely to the Ultima lore and world without actually having me in it. Therefore it's a nice place to start for the wary Ultima virgin. It's a totally independent adventure that has no effect upon the lore or story of Ultima later on.
UUW2, however, is connected to the other Ultima games, Ultima 7 specifically. You meet the standard cast of Britannia, plus some persons of note from Ultima 7, and find yourself in a situation that came about from your actions in that game. What's more, there are small hints and references that will play a part in Ultima 7 Part 2, so storywise it takes place right between them.
While UUW1 is one whole dungeon with variable themes, UUW2 feels like a series of opposing ideas bundled together. Some places work wonderfully like the Tomb of Praecor Loth, the Scintillus Academy and the Lost City of Anudunos, while others seem either a little cheap (Goblin Prison Tower) or are totally dependant upon your imagination to work (Killorn Keep, which is supposed to be a floating fortress in the desert, yet there are no windows or in-game graphics to help you visualize that).
Darth Roxor: You don't need to make those dragonskin boots to complete UUW1, but they help with dealing with lava. The game is designed so that you never really have to step onto it, and there are other ways to get across where you do. As for Fire Elementals, I killed them wholesale by casting Fire Resistance, wearing the dragonskin boots and bashing them in melee.
As for anyone planning to play UUW2, some simple tips (for those that don't read manuals):
# Dying in Britannia is permament, dying in any of the prism worlds will send the Avatar back to Britannia. So be careful when exploring the sewers of Britannia.
# One of the first rooms you'll explore in the sewers has 2-3 headlesses in it. They'll tear the Avatar a new asshole, so avoid them until later on. Like I said, be careful.
# The mean-looking trees that slowly slither about are Reapers. They are very tough and hit VERY hard, there's one early on in Britannia that I would recommend avoiding for a while, except his lair has a couple of things of value.
# Later on there's a Dire Reaper, one of the most dangerous monsters in the game. It's as tough and strong as a Reaper, but also shoots lightning at potential meals, like Avatars. I tend to cast Time Stop to kill it.
# Spells beyond the 4th Circle cannot be cast with the Runes while in Britannia. They can still be cast from scrolls and wands, though.
# Nystul has a chest in his room that has no key, and takes spectacular Pick Locks skills to open. It contains an Easter Egg, so don't bother wasting time or lock picks on it until the endgame.
# I do not recommend using the Fireball and Lightning spells to kill monsters. Items lying about in the game world can be destroyed by the Area of Effect damage of these (and other similar) spells.
# Items thrown into water (and lava) are gone forever, unless they're plot-vital quest items, which will 'float' on the surface.
# The Avatar doesn't have to fight every battle himself. Sometimes you can get friends to do that for him.
# For Thief veterans, the Tomb of Praecor Loth will feel very familiar. It should also be treated as such, for it has enough traps to kill the Avatar several times over.
Sadly, the only game that continues the tradtion of the Ultima Underworld games is Arx Fatalis, but there's also a Thief 2 FM called Ruins of Originia that has a really strong Ultima Underworld vibe to it, especially in the first and last mission.