In reality, this is more or less a decision for you and your friend. This is your game that you're making, so do what you guys want, not what other people want you to make. So I'm just going to sum up my thoughts and some pluses/minuses on each, and let you guys decide.
When it comes to graphics, for some odd reason people seem to assume that Gen IV graphics automatically make it a "better" game. I've seen someone say that you have to have Gen VI graphics for you game to be considered good. That's pure bullcrap. But if you want to look more "professional" then you could try Gen IV.
On the plus side, Gen IV graphics usually do look better and there's tons of public resources out there for them. But on the minus side, Bad mapping skills become rather obvious - if you're bad at mapping (and I'm not saying you are) then it will show far more in Gen IV, - and Gen IV graphics are more scattered. There's tons of resources, but you'll have to do a lot of hunting and assembly on your own to get everything you need, which is going to take some time, effort, and knowledge.
On the other hand, Gen II is a bit simpler. It's not as detailed, but it does have it's own certain nostalgic charm to it. Since it's a bit older, the graphics aren't all the detailed (they're still good) which means it would be easier to make tiles and/or other graphics and have them fit in well.
On the plus side, Gen II is a bit more basic, meaning that it's easier to make tiles for Gen II style, it's not used nearly as much as Gen IV, meaning that your game might stand out a bit more, and there's already a decent pre-made Essentials GS kit for it. On the minus side, it's a bit more basic in design (though appearance isn't everything).
I'm not going to state my opinion on what you should use - just use what you and your friend think is best. Try both of them out, and see which one the two of you like the most. This is your game after all. Make it the way you want it. And if you can't decide, then compromise. Try Gen III. There's nothing wrong with Gen III.