Hi,
All ports default to GPIO on reset. You can check in the debugger, but you most likely need to set MCF_GPIO_PUBPAR to set UTXD1 and URXD1 to their primary (as opposed to GPIO) function. Something like:
MCF_GPIO_PUBPAR = MCF_GPIO_PUBPAR_URXD1_URXD1|MCF_GPIO_PUBPAR_UTXD1_UTXD1;
See section 14.6.5.2 of the reference manual.
It is likely some piece of code is doing this for you for UART0, but you have to do it for yourself for UART1.
You can use just the TX/RX pins for UART1 if you want to -- just make sure you initialize it without hardware flow control (which I believe is the default in the UART control registers).
If you use UART1, you may need to use an external level shifter to convert the pins to RS232 levels, like: http://www.sparkfun.com/commerce/product_info.php?products_id=133
-- Rich