Yes, method 2 is the same as method 1, it just gives you pretty urls. This is the way I would go because I work for an SEO company and they would insist on having pretty urls. I’ve done similar things in the past, but it takes me longer that it should because I don’t do it frequently enough and I always run into problems. For example, the last time I did it I forgot that I had to register my query variable with WP so it was not being passed in correctly. When you use rewrite rules you need to use WP functions to register and to get the variable, while in method 1 your can just access $_GET values directly.
