The overall look was much more imaginative. In Unreal 1, the graphics put anything else out at the time to shame. In the single player part of the game, when you get out of the ship in the first level almost everyone who played it stood there looking at the world that just unfolded on their computer screen.
In muliplayer, the maps we concentric to the gameplay. The character models were, well, believable.
UT made these chunky, cartoonish-looking cahracter models, smaller maps, and turned it into a glorified version of Quake Arena. The unreal 1 maps were proportiened to the gameplay. Some were very small, action packed arena's while others were extremely large. Unreal 1 had a depth of field that the UT's never recaptured.
The first thing I noticed about T2 was the better depth of field than in T1. Most of it was due to the shading capabilities of the Torque engine.