Im planning on starting K this fall and I am going to be doing option 1. Like Jessica and some others stated, I want to choose my own books to read versus having to follow a curriculum in something like FIAR. If you are more into structure, then FIAR would be great for you. I like structure, but when I looked at the FIAR books, I didnt jump up and down with excitement. That is one reason why I am implementing option 1 with my own child. Also, I believe that option 1 will offer more creativity options in the end.
Good luck with your decision, and just know that whatever you choose, it will work. :)
Kimmi