Not having Elric, I've been over the Training bit in the core very carefully, and am convinced your first interpretation is correct. It has been asked here before without any official clarification.
The break down behind my reasoning that practice and research still needs improvement rolls follows:
P.94 Core Book: Improvemnt Rolls reads:
Skills and Characteristics are increased through the use of improvement rolls.
Pretty straightforward - skills are increased through improvement rolls. Not ir's and practice and research, just ir's. But it is a pretty general statement, so it is open to interpretation.
P.94 Improving Skills opens with:
A player can choose to spend one improvement roll to attempt to increase one known skill.
Again, straightforward.
P. 95 Practice and Research opens:
There are two ways to improve skills - by practice and research.
Now this section is a sub heading under Improving Skills, which opened saying you spend an ir and make a roll. It does not say that that these are in addition to spending ir's, so to me the fact is that this a part of the Improving Skills section means that this is in addition to spending the ir mentioned at the beginning of the section.
But the clincher for me follows, under Practice (p.95):
While adventuring, characters will use their skills against enemies and adversities, as well as find the time to practice specific techniques while camping or during a long voyage. As long as a character can feasibly practice their skill during an adventure, it is safe to assume they have. Many skills, especially Basic and Weapon skills, will be repeatedly practiced throughout the course of a typical RuneQuest adventure, as the characters leap over crevasses and duel deadly villians.
If Practice and Research are meant to be a way of improving skills in addition to spending improvement rolls, that passage would be saying that characters can increase their weapon and basic skills used or practiced during an adventure without spending improvement rolls - essentially the RQ2/3 experience system (plus the suggested three ir's per adventure on top of that :shock: ).
So based on the Core Rulebook I'm pretty convinced that ir's are the only way to improve skills. That being said, As a GM I can see giving some IR's for extended periods of study or practice. I think the intent of the rule is to put the rate of improvement into the GM's hand, rather than the players hands (i.e. the frivolous use of skills just to get checks, or 16 hour a day seven day a week training regimens every second of downtime, that could happen in RQ2/3).