This is as of Selenium 3.4.0
We now have two separate artifacts.
For example, if you head down to the Selenium downloads URL you would notice the following two artifacts
selenium-server-standalone-3.4.0.jar - This is the Grid (or Grid2 as you call it) as we know. This standalone jar can work in 3 modes viz.,
Hub - It acts as the hub standing in between your test and the actual node that gets the work done. Kind of like a postman/mailman and a match maker.
Node - This is the actual place where all the action happens. When running in this mode, it is responsible for getting automation requests from the tests routed via the Hub and opens up browsers, performs UI actions, etc.,
Standalone - This is pretty much the same as Node but just that it doesn't require a Hub to route the automation test traffic to it. Tests can directly point at the Standalone and then start running. I believe this is perhaps the kind of setup that third party execution environment providers such as SauceLabs may be using. (This is just a hunch, I don't know for sure).
selenium-html-runner-3.4.0.jar - This is where all the legacy stuff (or Selenium RC as you call it) has moved into. So if you had an html test suite that you created by recording a UI flow using Selenium IDE and wanted to run them from a command line (Note that you can always execute an html test suite from within the Selenium IDE and don't need anything extra), you would use this.
There is nothing called as Selenium Grid1 anymore. There's only Selenium Grid2 (which is the re-engineered version of Grid1).
The Selenium RC support exists only as a stop-gap solution with no maintenance as part of selenium-html-runner-3.4.0.jar. This has been officially deprecated and there's no support for issues that surface on this.
The expectation is that if one were to be using Selenium and building new tests, then one should be directly using only the WebDriver APIs (which is Selenium2) and not fall back to using DefaultSelenium APIs (which is Selenium1)
I hope that helps!