It's not about performance, it's about what meets your requirements.
Option 2 will only show the last user who changed the row and won't show what they changed. If you need to see all the users who modified the row, then option 2 won't suffice.
Gail Shaw
Microsoft Certified Master: SQL Server, MVP, M.Sc (Comp Sci)
SQL In The Wild: Discussions on DB performance with occasional diversions into recoverability