I am not sure about any specific differences, but psycopg2 is what I
believe to be recommended by
initd.org, although there seems to be a
problem with their Trac so I could not confirm. I originally (2 years
ago) setup up Django with psycopg1, but when I rebuilt my development
environment last year, there was a disclaimer at
initd.org that
essentially said psycopg2 is the one 'you should use', so I went with
it. I have not noticed any differences, but all of my interaction
with the database through the ORM is pretty tame.
HTH,
-richard