It would seem that option 2 is your best approach. This would allow the easiest way to share content. You could set up categories to determine where each post should go, this allows you to share content and keep it separate.
Option 2 is epically a good choice if your blogs are similar in style, and just have some color differences. Instead of building different WP installs, you could just make page templates (1 for each design) and assign them to the different category pages.
The only hold up option 2 creates is if you have separate URLs for each of the blogs. You would either want to forward them or set up some kind of mapping to a sub-folder.
Option 1 allows you to create separate URLs (with mapping) or sub-directories and gives you one control panel to manage everything. But, would require some tweaks to share the content. I’ve had luck with the tools available at http://wpmu.com they may have some plugins that can help with your needs. Also, http://wpebooks.com is a good resource for WP Network info. Both are good resources.