My grain of knowledge on this just from experience (mine will be 2 and 4 next month) is that with your first you don't experience this as much b/c they have so much time to themselves with their toys and with you. Number 2 never gets that at the time when they don't understand how/why/etc to share and play nice earlier b/c there is always another person there using the toys.
If mine are playing in the same room together, I try to engage each in separate things on days when they are more likely to not share or play well together. More times than not one of us just plants ourself between the kids and plays a bit with each. My fil started doing this on his days with the kids, so we went along with it. So they both get attention from you, are not near enough each other to harm one another, and are entertained.
When I can't do that I pull the younger away to "help" me. I try to give my older son his time with his blocks alone while I cook by entertaining the younger one with some messy kitchen fun (a bowl of water one day, flour on another, sometimes water and flour, sometimes he just plays with the faucet). While I use the broom my younger is happy to walk around with the swifter or our dust mop (I unscrewed a section of handle out of the dust mop and screwed the other peices back together so it's short enough for him). it's a temporary solution, but when the younger one is a bit older and plays better it won't be quite so necessary.
As for the looks I get when I warn them, completely different. I can tell my 2y/o doesn't understand and he often giggles, smirks, or gleefully laughs and runs away. At nearly 4 my older son gives a mean look of defiance before doing something contrary (which isn't often). That's how I see the difference between the 2 of them. The nearly 2y/o has no idea he's being contrary, it's somehow just a game. The 4y/o knows what he's doing is against the rules and knows he'll get a time out and does it anyway. You can tell by the look, he's thinking will she really go through with the timeout. we're consistent so he doesn't do it too often.
Knowing that they are on completely different developmental mindsets, I teach them differently. I'm more of a fan of "teaching" than "discipline" per se. I'm not a big fan of time outs before age 2. Even at age 2 I'm a bit leary...closer to age 3 maybe.
At 23m we still use distraction and showing him what TO DO. So when I hear trouble brewing I'm in there and working with them. It worked well with my older son too at that age. things like "no hitting, touch nicely" I'd take his hand and gently guide him to pat a shoulder or head. "we kick balls, not people" "you can bite your stuffed animal or a teething toy but not people" "teeth are for chewing" And I'd grab a teething toy and bite it. (my kids were much more prone to biting while teething). Pre-speech I allow stomping, growling, yelling...when mad and I'd tell him it's okayto be mad and to do one of those things. Mine both knew words like please and thank you early on. So I say "ASK your brother for the toy by saying please". So when I hear "no Eli you can't have it right now" I know he tried, so I try to get in there and help out (distraction).
As they learn words I teach those as alternatives. And maybe it's not fair but I often remind my older child how short his little brother's attention span is right now. I encourage him to share a coveted object b/c his brother will let it go in 30sec. That's worked alot. 1/2 the time he'll hand over a toy and just picked it up again 5 sec later.
Our biggest problem is that the younger one destroys the building projects made by the older...or interfere's in the building process. That's why I try to engage the younger one often and just let the older one go at his work. Danny is more than happy to have Eli out of his hair for awhile. other days they play together just fine for 15min or so. We used to have the older one always grabbing things from the younger...so we taught him to barter and trade (or wait).
Since I'm not a big fan of time out for the younger one yet (and not even sure it wouldn't just be a waste of time on him at his developmental level), prevention is just more effective...but still tiresome. They'd be in time out 24/7 and I think our method would be much more negative in the long run if we let go of the prevention method.
So it makes me tired and takes a lot of effort but no one has been hit, bit, pinched, kicked, pushed, or scratched in about 3-4 wks....unless you count the playful wrestling and tag games where others accidentally get hurt in the fun of being rough...they're boys...what can I say...as long as it's in fun and accidental. I know it's time for intervention when I hear the older one say "Eli I'm building this and I dont' want any help from you right now!" I guess all I'm really saying is that for me i'd rather be tired of intervening before the blowup(ie preventing) than tired of enforcing yet another time out. So it's working but I'm tired.
Oh and my almost 4y/o's preschool teacher has heard quite a bit of our "teachings" and phrases from our son at school. He's always been my "old soul" child. I can only hope she hears the same from #2 in 2010, when he goes to school there. I hope it's sinking in.