What would you choose soundwise of these 2 chains and why ?

No such thing as that kind of truth in HiFi and very little in life. 

What sounds best to you in your individual ears/system/room is best for you. It may not suit anyone else. Your circumstances sound particular so it is very likely that no one with undamaged hearing will be able to give you meaningful advice.  

I very much conform to the rubbish-in-rubbish-out principle and not just in HiFi systems. But one should never close off one's thinking and assume that what works for some always works, or ever works for everyone.

As time goes on and you visit HiFi owning friends, dealers, open days etc. you gradually get to hear various combinations. You may not hear all possible permutations but you will get an insight into what you like and what you don't. Can't have it all on day one. But you can listen and do what your ears, however they work, tell you.

I feel I have been slightly misquoted here, what I actually said was 'I believe that a great source into a mediocre amp would would sound better.......".  Not a universal truth and not one that I have extensively tested over many years, just that I believe this in a theoretical situation.  naturally experience and conditioning have encouraged that belief.

If I were stopping after this investment I would go for System 2. Well in fact I did because I owned that very same system (minus the XPS2).

If I planned to move on in time and upgrade then it can save money in the long run go for either a Monkfish or a Mullet by skipping over the odd intermediate step. In fact eventually I swapped out my NDX for a NDS (but not with a 555 yet) and given a bit more thought might have gone for an NDS in the first place. But Monkfish tend to be expensive in the first instance and I probably would have left this leap of faith much longer and would therefore have missed out on a lot of musical enjoyment from the intervening Eel.

Geez, anybody joining the forum for the first time reading the above would think I have gone round the bend! I am sure all you fish lovers out there know what I mean.

Such a thoughts are probably not limited to newcomers.  ;-)  Aren't we all round the bend here?

I own System #1, and it does not pain me that I am not 'extracting all I might' from the NDS.  I do know from experience that the NDS is capable of revealing the improvements brought as one goes up the ladder of Naim sources, and owning Naim's "best" source was of interest to me. 

I really enjoy this system and am blissfully ignorant of whether I'd enjoy #2 more.  But its boxcount is a non-starter for me.

If I were starting from scratch today, I'd definitely listen to 272/250DR as well.

Bit harsh. But probably an element of truth in there. 

Absolutely and this goes to show there is no right answer.

The OP should be able to find a friendly Naim dealer who could put together both Systems 1 and 2 and hear for himself. All I would say is that it would be helpful to go into such a demo with some idea of the end game. Are you stopping here or are future upgrades on the cards? It simply isn't necessary to go up the Naim ladder in order and this can end up being very costly.

I owned System #1 without HCDR (demoed and nearly bought along with SL IC and speaker cables) and took the view that to support the NDS properly and get the best from it was just too expensive in the long term so have re-arranged my set up to 272/250DR, which is due in a couple of weeks time.

Lots of outside reasons for the shift in kit (new job/house equation etc), but one other reason was that a 272/250DR was a good level for me and NDS was perhaps pitching too high. Longer term I couldn't keep an NDS truly happy. SN2, for me, was bringing the NDS down to its level, which could be argued is the level a 272/250DR is equally at with SL IC?

Reducing box count was another minor consideration, but then if I get an XPS PSU back to three boxes.

I felt a 272/250DR with perhaps a SL IC, better speakers and maybe the XPS was overall a better cost/performance balance to the NDS/555DR/SN2/S400 system previously owned.

Just my reasoning and I needed to release cash from the NDS/555 system for that job/house move so hopefully a win win overall.

New speakers maybe Focal Aria 926s or stretch to 1038BE IIs.

If it's the end system the NDX based system. If it's a step in the process definitely the new based system.

I've asked my NDS many times, and he is very happy being connected to my SN2.  If he were to be troubled, I would consider a switch . . . but fortunately he is, to use his own words, "very happy, like a pig in shite."

So fortunately, I can just relax and listen.

(NB - I do not dismiss your desire to release funds and perhaps get more out of your budget.  That is no laughing matter and we all should put our financial house in order and not stress it with such luxuries as these.  Fortunately, the NDS could be afforded.)

My CDS3 has also been very happy with a Nait2/Nait5i/NaitXS, and now SN2. In fact just as happy as when it was with more costly partners, and has never complained once.