Setting up a 989 to charge two 4S lipos

[lincpimp]

I would hook them up as you describe in your second option. Using 2 balancers and having all of the cells balanced will get the longest life out of the packs, regardless of how they are wired.

You cannot wire the 2 packs in series and use one balancer, as those balancers are only good for 6s, not 8s. Your 2 4s packs in series would be 8s.