Not to mention, G2 story line changes depending on which on you pick.
Err...that's not even possible.
You can't 'pick' dark knight or paladin before G2.
Since you get paladin by finishing G2, and optionally dark knight from G3.
The only possible change is whether you talk to Eavan or Aodhan a lot. Eavan if you're a boy, Aodhan if you're a girl.
Anyways, as for the differences -
PaladinNo int bonus
Higher defense and protection for less damage and crits
Fixed amount of stats you get.
Dark KnightInt bonus
More health, but less defense and protection
Crit bonus
Out of str, dex, and int, one gets an 180% increase, one gets a 100% increase, and one gets a 60% increase. Changes randomly everytime you transform.
Control of darkness which allows you to take control of something based on how strong it is to you
Uglier (An opinion that even some Dark knights share)
All I can think of for now
Just compare the pages -
Paladin -
Dark Knight