Is there a significant different between picture and sound quality between the two different box sets? Or is it a relatively modest difference?

I know that the great doc is only available in the second set.

HUGE difference. The original sets looked and sounded like C_R_A_P. Like the original versions, the re-releases are mostly full-frame open matte (at the director's request, allegedly ) Still they are much, much better versions. It's the only way to go.
There's a good DVDFile article on the re-releases here.

Don't even consider the original set; I have both and excluding Lolita and Strangelove, the initial set is virtually unwatchable.

I have the original set. Was wondering if I should take the $90 or whatever it costs now for an upgrade or buy $90 worth of quality movies that I don't already own.

I suppose it depends on how much you enjoy and will replay the movies in the set; I found I couldn't watch most of them so for me it was worth the expense. Both the color and sound are improved (though it varies by movie) on the new set. Check the reviews at DVDFile for a look at each of the films.

Exactly. If you love the films, this is a highly recommended upgrade... [dead horse]Despite the framing issues and lack of anamorphic transfers on the letterboxed films[/dead horse].