Simply put, Type 1 photos were printed from the original negative within 2 years of the photo being shot. Type 2 were printed from the original negative more than 2 years of the photo being shot.
There has been a great deal of debate in another string of posts here recently about whether 2 years is too restrictive or not, but that is the cut-off as it currently stands. Obviously, if you're selling a Type 2 photo, you will want to provide more info than just the Type. If you had an original 1920's negative, you could technically produce an unlimited number of Type 2 prints tomorrow, but those would obviously be less desirable than a 1930's print that fell just outside the Type 1 timeframe.
Hope that helps.
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