Your "inline" function #2 is basically the same thing as a scalar function. It is multiple line function which means it behaves the same way. In fact, many time a multiline table function will perform even worse than a scalar function. In essence your function #2 is no longer an ITVF, it is now a MSTVF (multi statement table valued function).
Check out this post which does a great job explaining the differences. Make sure you read the comments to because there is another great article linked to there.
http://www.sqlservercentral.com/blogs/discussionofsqlserver/2012/02/15/comparing-inline-and-multistatement-table-valued-functions/[/url]
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