I have two domains hosted on a single hosting account.
Rob,
When I started webhosting with cPanel I tried what you are doing. The only way I terminated that problem was to take off the /site2 and simply put it as
www.site1.com.
But if the sites are not really realated to oneanother then you have no need to point one site to the other. If I'm missing something then please tell me. I mean you can redirect any website you have to point to anyother site that you have.
I host over 290 sites, but I might be tired and be missing something too.