When wanting to play KV2, I can't help knowing there is a MSX 2 version, I always play the MSX 2 version. It is real eye-candy. (not saying the msx 1 version ain't eye-candy too).
AFAIK the game play is exactly the same. SO I guess the only difference are the graphics (and the box colour).
If you look at these two pictures, the background in the msx2 version looks more 'alive' / has more depth.
In the msx 1 version the items and ladders have a black background and enemies are transparent. The hammer is diagonal drawn. Don't know about the other items.
Both versions are excellent. In my opinion the MSX1 one (forgive the repetition) is better because when the main character picks a tool/weapon the game does not make a little pause.
As sd_snatcher has told us, he solved this issue with his awesome patch.