I have owned and ridden the V1, and recently built up a new wheel set with the V2. I always ran really short slack on my V1. I replaced the driver bearing once but otherwise never had any trouble with it.
I have ridden the V2 for a few weeks now and the engagement feels a little more rigid than the V1 did. I can empathize with Dax a little on his experience with the V1. I think the engagement will improve as I ride it more. The beauty of this coaster is that you can adjust it on the fly without having to remove the wheel from your bike. I really like that feature. I have my V2 set to stock slack right now, that is to say I have not adjusted it since I got it new. It is almost to the 1/4 crank for me on a 25/9 gear ratio. I have been happy with it like this and haven't found a need to adjust it. I assume you can add more slack to this, and definitely take away slack as well.
I have not been disappointed with this coaster at all, in either version. I ran the V1 with a converted 3/8 axle, but my new frame was 14mm and I bought the V2 for it.
Hope this information helps.