You can use Seam 2.2.2.Final or 2.3.0.ALPHA. The latter is usable with jsf 1.2 too as it has got only Maven structure and a few important bugs fixed in comparison to 2.2.2.Final. Don't be confused by Alpha qualifier.
Differences between seam and forge ? It is completely different animal . You probably would like to ask for comparison between Seam Gen and Forge, I think.
Seam Gen uses Seam 2 features and helps with bootstrapping development of a new project. While Forge is similar in nature to help and provide general scaffolding which uses multiple plugins to be able to generate templates, classes and configuration, it creates project code based on Java EE 6 technologies and higher. So in frame of usability Forge is the successor of Seam Gen, but has got much wider feature set and customisation due its plugin architecture.
Unfortunately Forge doesn't have plugin for Seam 2, but that is the wanted as we all should migrate to CDI and Deltaspike