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I bought the Hero2 and love it. In addition to the external mike, the other advantage the 2 has over the 1 is the LCD display. The 1 gives codes you have to decipher for the camera settings, where the 2 puts it in plain language.
I'm in it for for about $500. That includes the camera and a bunch of accessories. The accessories include: extra batteries, charger, external display, camera mount, handle, long life battery, case and some floats. Expensive, but well worth the price.
By the way, I used it on vacation in the Fla Keys and it worked great. Used it for a kayak excursion, snorkeling and touristy things around Key West.
YouTube has some comparison side-by-side videos of the Go-Pro and the Contour.
John
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RACECAR spelled backwards is ....................RACECAR
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