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ATTENTION!!!
This post is not yet complete and will remain a work in progress until a few people who've done the swap have chimed in.
Thank you.

Thanks to Zoran of Twin Works Factory and "Noobs" for the information they provided.

The SV650 engine has not changed much from 99 to present, this means that if you blew your 99-02 engine, you can swap it with a 03+. There are however some important items that need to be changed. The intake boots are different but your 99-02 boots will bolt right on. The stator and rotor assemblies must be swapped out as the timing signals are different. The thermotat housing must be swapped out as well so you have the correct sending unit for the temp light in the insturment cluster. Gen1's use exhaust studs, gen2's use exhaust bolts. You can use either, they will work just fine as all the measurements are still the same.

According to Noobs, the gen1 exhaust cleared the oil cooler with a little room to spare. Zoran used a gen2 exhaust and said it was an easy swap, I'm assuming he used an aftermarket exhaust as the stock mounts on 03+ would not likely match up with a gen1 frame. Aftermarket exhausts do not have many mounts so they should be much more forgiving.
Another option would be to relocate the oil cooler. I believe it can be moved up slightly without much modification.
You could also bypass the oil cooler to get rid of it. That could be done with a piece of hose atached to its fittings.

All gen2 motors have the PAIR system. It injects air into the exhaust system to help finish burning any unburnt gas left after the engines combustion cycle. Part of the PAIR system is a fitting on the valve covers. Since the gen1 does not have the air pump or plumbing for this system, it's best to simply use your gen1 valve covers. No other work is required concerning the PAIR system on your gen1.

In 2007, Suzuki went to dual spark plugs in each head. This was done for emissions and does not provide any more power. Simply leaving one plug not connected should be fine, you could also block off the second hole with a bolt of the correct size. If you really want to use both plugs then adapting a set of 07+ coils should be easy enough. A set of Harley-Davidson coils should work fine as well as they have dual out puts, you would need 2 sets of HD coils.

At least one person has been daring enough to also swap over the fuel injection onto there gen1. This basically requires swapping over everything and fabricating some parts. The wiring harness, airbox, gas tank and gauges are just part of it. You also need to fabricate a new rear tank mount, gauge bracket and figure out where to mount the misc electronic devices like the ECU, etc... There is also a large gap left between the frame and the gas tank because of the difference in shape. So yes, it is possible and it has been done... but is it worth it? Who knows...

Optional Cam Info (More Power!!)
The gen2's have a slightly hotter cam profile which is why they make slightly more power. You can increase power a little more by taking your gen1 intake cams and puttting them on the exhaust side of your new gen2 motor. The gen2 intakes stay where they are. Read my Cam swap thread for more detailed info on how to do this...
 
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