Extreme

The keypads are interchangeable. Also, they are readily available as replacement parts.
The 880 V1 will program just fine from the same Windows program that works on the V2. You will just get a notification that any V2 only functions will not load into the radio. I have both V1s and 2s and use the same cable, software and data file for both.
 
Download the service manual, too. It goes into a lot more detail on programming.
 
Yes, I would recommend getting 1-7 and 15-22 programmed. I would ask for 1-7 as low power, narrow bandwidth, simplex. I use 67 Hz PL TX and RX. This is to make it compatible with the widest range of handheld radios, including cheap, old FRS-only radios.
 
15-22 I would program as repeater pairs, high power, wide bandwidth, 141.3 Hz PL TX and RX. That gives you the best chance of being able to get into a repeater if you need to.
 
I would have the buttons programmed as follows: left up/dn = volume. Right up/dn = channel. MON = CSQ toggle. A = TA. B = Scan D/A C and D = group up/dn and SCN = scan.
 
I would in fact probably put 1-7 in one group, 15-22 in a different group.
 
So, here's how that works: Unless your group has the PL tones set the same as yours, keep it set to monitor (MON will appear in the display). That allows you to hear all traffic on the channel, regardless of tone or lack thereof.
Keep TA set to on (TA in display). That makes all channels simplex, whether they are set as repeater pairs or simplex.
 
I would have the scan set to "multi" so it will scan all programmed frequencies as opposed to just the group/bank you are on.
If there is something on a channel that is a nuisance, just press the B button while it is on that channel to lock it out from scan. That function will reset when you cycle the power.
 
TK-880 can be programmed from the front panel, but first you have to remove a zero ohm resistor and enable that function in software. By default, that function is not available.

used-radios.com tells me the 863 is a newer radio than the 880, that "the buttons will last longer" and it has a few more options/features.. maybe features I might not need. 
 
880 V1.0 is DOS programming only.
880 Firmware V2.0 is Windows. 
 
863 is Windows only. 
880 programs from display (youtube) - 863 does not.  Probably a non-issue if the Windows programming is EZ.
 
Should I just get the standard GMRS 1 - 7 and 15 - 22 pre-programmed?  Any other whistles I should ask for?
 
I'll get the cable and software just to have.. I do like to tinker with my toys. Anyone have a link to both (I know, SEARCH).  I have found the Owner's Manuals online so no one will have to tell me to RTFOM!  Maybe.
 
Thanks folks!

New quandary.   I've been cruising/surfing to make a choice on which Kenwood to buy.  Most info is from here, some from used-radios.com
 
Kenwood TK880 
Kenwood TK863G
 
The 880 seems to have most mentions.   Prices seem to be within $10 or so.  What are the differences please?  The more I learn, the more I don't know...
but I'm thinking 25W should be plenty of oomph for mobile (non-repeater) use in the mountains.
 
Thanks again folks.

Did the deal get done?
 
Looked at M1225, 20Ch at $135 and Kenwood TK-863G, 256Ch at $95 on usedradios.com.  They seemed to think the Motorola was more than I need.
Use will be mobile to HT, little if any repeater use.
Is one much "better" than the other?
 
I've pretty much put Midland out of the picture.

You are mixing apples and oranges. A 32” UHF antenna is almost certainly a high gain antenna and requires a ground plane. A 15” UHF spike would more likely be a half wave, no ground plane antenna with low gain, probably 2.4 db or so. A quarter wave, unity gain spike at GMRS freqs is about 6” and requires a ground plane of about 6” in all directions. You easily find an NMO base adapter with trimmable radials.
 
Personally, I’d put my first effort into the very low profile quarter wave option due to best survival of tree branches.
 
Hint: read the full description and specs for each antenna to avoid inappropriate comparisons.

I just received mine and have had it a couple of days. Have compared it to the BTech GMRS-v1. This radio blows it away. RF performance is amazing and I can hit all of my local repeaters from inside my house. One of them almost 30 miles away. The circuitry is way superior to the radio on a chip unit. Wish the buttons were rubber instead of hard plastic. Screen viewing angle isn’t that great either. But the little cosmetic flaws aside it’s RF performance justifies the cost completely.

I have a couple of 862G Kenwoods, and they are great.  I assume the 863 is about the same, but 256 channels instead of just 8 like mine have.