I think that the trade (losing track of waking-life stuff) would be vastly outweighed by the life-extension of getting a "free" year every night -- especially since that "life" is one of a lucid dreamer exploring unlimited new universes and conscious experiences without threat of impending wake-up. Besides, it would make the relatively short time in waking life even more valuable, because every wake-up would be like a homecoming. I would probably be a somewhat different person after a few months of this, but I think that difference would be positive, and not something bad.

Also, to turn down the chance to develop my Self and explore existences and experiences I have not imagined, perhaps currently cannot imagine, would, in my mind, be a profound mistake.

So yeah, I would take #1, for sure... would that the offer could truly be made!