I have a lot of copper to recycle but I do not know the difference.
#1 is just the pure shiny copper. Wires stripped and no casings. #2 is copper wires that have had the casings burnt off. This makes the copper look Black from the heat. Of course, you get more money with #1!!
In the case of copper pipe, when you take it to a scrap metal dealer #1 is copper pipe with nothing on it. #2 is copper pipe with solder, and fittings still attached to the pipe. That's why people clean' it before they take it back #1 is worth more per pound than #2.