In 4xx firmware AP Isolation applies to both SSID#1 and SSID#2 and will prevent wireless users from being able to communicate with other wireless devices. If you are using wireless printers or devices like an Apple TV, you will need to turn off AP Isolation for those things to work. With AP Isolation enabled, devices on SSID#2 would be able to communicate with devices on the LAN but not on the WLAN.
In 5xx firmware AP Isolation only applies to SSID#1. In Cloudtrax 4 the option is called "Client Isolation" and can be toggled for any SSID.