#2 for sure. I'm biased toward cold weapons, for no real reason. I really like the ability to dispel magical fires, the AC/Saves/Initiative is great, and Icy burst is a fantastic addition. Obviously the campaign would dictate the relative power of each, but I would grab #2 with all else being equal.
I would pick #1. The protection from evil while drawn seems really nice. You don't have to worry about charm and dominate spells which can be really nasty if your hit with one at the wrong time. Also if you are effected by a dominate spell while you don't have your sword drawn, the most likely command you would get would be to attack your party which would lead you to drawing the sword.