There have been discussions on the Gen3 forum about using LED in the projector-based low-beam lens regarding bad light spread and/or intensity. I imagine that will be the same for the Gen2. I have
HID in the low beam and
LED w/DRL driver for the high beam, both from XD, which has lost much fanfare recently due to (1) defective products and (2) lack of support since TRS took over. I liked them when they were based in Canada, but now they're based in Atlanta, and doesn't offer the same experience as before. Regardless, I have had no issues with both kits using the stock headlight assembly. The auto feature is maintained and functional.
Here is the Gen3 informative post regarding using LED and the poster indicated the problem with XD's kit, but it shouldn't be limited just to them, any LED manufacturer with similar gap will have the same issue. An underlying problem has been that XD was promoting their products quite heavily in the past on the forums and people bought into and recommending it, myself included. Anyway, in my experience, the HID bulb is physically similar to the halogen bulb, so they work well in the stock assembly, even has the nice cut-off without blinding coming traffic. It may not have the wider beam spread compared to a Morimoto projector, but it's a much appreciated upgrade over the halogen in terms of brightness.
For your Gen1, I recommend not using any LED (or HID) for the low beam since it's a reflector lens. I currently have a LED setup in my Gen3 RAV4 with reflector lens, while brightness is very nice, but the spread is bad and will blind oncoming or front traffic. I'm planning to retrofit a proper projector/HID kit in there instead.