Yes, Version 1 and Version 2 can mate. But make sure they are in love by going to the friend book. When you see your tama's mate, press the middle button twice. You should see a certain amount of hearts or smiley faces. 4 hearts means they are in love! At least 24 hours after they fell in love, connect them again and they shall have kids! Same works for 2 Version 2s or 2 Version 1s.