You don't need to have played the first to enjoy the second in anyway. When put side by side, I'd say the first game was better overall, but the story was much more organzied in Factions. If you decide to go for Factions, you'll get a couple of game modes Prophecies players don't, and you'll get to level 20 so much faster than in Prophecies. My main dislike about Factions was the amazing AI upgrade they did. Now, normally this would be a good thing, but when you're able to beat the entire game (knowing that its a MMO style game) using only the computer controlled henchmen and never having to team up with real players, it lacks the cooperative feel of the first game. Also, as I said you reach level 20 (max level) within the first couple hours of the game in Factions and it feels quite rushed. Whereas in Prophecies, its paced so much better. It feels like the devs got lazy in Factions and said screw balancing, lets make every mission a level 20 mission.
Overall, for starting new, I'd say get the original (Prophecies) since its paced better and feels like a complete game, unlike Factions, which feels more like an expansion.