Stick with Disc 1 for general racing. If you want the full content, look for a pre-merged single-layer ISO or extract Disc 2 manually and hope for future Xenia updates that fully support installation discs.
Before diving into Xenia, it’s crucial to understand the original disc structure: forza motorsport 4 xenia disc 2
If you want Xenia to mimic the real console experience of inserting Disc 2 to install it: Stick with Disc 1 for general racing
: An "Installation Disc" containing roughly 250 cars and critical assets for the Autovista mode . forza motorsport 4 xenia disc 2