I'm going with Team 1 too. I feel that Sai is the most powerful one here; he has his blade for close range and ink spam for long-range. They're versatile too, so it keeps the enemy guessing (although Hinata's Byakugan saves them from a lot of counter attacks). Sakura can pop in every once in a while with her sleep bombs to cause some raucous too.
sai punched the hell out of and knocked down deidara, and managed to seal kisame's teacher. i think he will handle hinata. sasuke commended him on his taijutsu skill too.
sakura pulverises kiba since in databook she was overall more powerful by far.
actually sai can just make a bird and then sakura drops sleep gas bombs. team 2 suffocates and then gets their throat sliced by poison kunai and sealed. no kill like overkill
Sai binds both Kiba and Hinata (who doesn't have rotation) with snakes and Sakura smashes them.
Sai flies up while Sakura drops sleeping bombs, then she goes down and smashes them.
Sai sends lions to distract Hinata while Sakura runs up and smashes them.
Sai sends beasts in with poisoned kunai in their mouths that eventually scratch them... and then Sakura smashes them for good measure.
I see Team 1 winning every way you look at it. These two actually make a good team.