Writing a flashback in present tense can give a certain dreamy feel to it. For example,
I remember it like it was yesterday. I remember Billy-Bob McJoe saying, "It's all about steady hands. All about hands and cheese and potatoes." He looks me square in the face, eyes hardening. "Never forget the potatoes."
On the other hand, this is sort of awkward in the third person:
She remembers it like it was yesterday. She remembers Billy-Bob McJoe saying, "It's all about steady hands. All about hands and cheese and potatoes." He looks her square in the face, eyes hardening. "Never forget the potatoes."
Another option is writing the present in present and the flashback in past tense:
I/She remember(s) it like it was yesterday. I/She remember(s) Billy-Bob McJoe when he said, "It's all about steady hands. All about hands and cheese and potatoes." That's when he looked me/her square in the face, his eyes hardening. "Never forget the potatoes."
Writing both in the past does not work well--in my opinion--in first person, since in that case there is no way the reader can think of chapter two as in the now, but this works fine in third person; auhors frequently use past tense and third person when telling a story.
So take your pick of person and tense, I won't make the choice for you. I only eliminated the bad ones. So choose either 1st person present/present, 1st person present/past, 3rd person present/past, or 3rd person past/past. Just remember: You will not write in 2nd person future.