There appears to be two ways to write this character, anyone know the history of this or when to use which one?

I've personally never seen the second character you have there, nor could I find it in the online dictionaries I have. So I think it's safe to say the first is correct.

If you want to track down the status of these kinds of variants you can go to the unicode site:

http://www.unicode.org/cgi-bin/GetUnihanData.pl?codepoint=%E9%BA%BC

http://www.unicode.org/cgi-bin/GetUnihanData.pl?codepoint=%E9%BA%BD

The first is the common form in CNS and Big5. The second is a Z variant of it. Notice that the big dictionaries have both forms.

The 1st one is actually the one used in traditional version, the 2nd is the one that has been simplified and used in mainland china.

Not sure that's 100% right Tortue, the simplified "me" is 么. Wikipedia says a little more about Z-variants in unicode. Basically they are variant ways to write the same letter. Not sure about the history beyond that though.

http://en.wikipedia.org/wiki/Z-variant

My wifes parents from taiwan were surprised to discover what you are calling the normal version. They always write 麽. Not sure if that is an indication that it is a taiwnese-ism.

Both 麼 and 麽 are the traditional form of 么.

麼 is the traditional version used in Taiwan, and also in the 康熙字典 . see: http://dict.revised.moe.edu.tw/cgi-bin/newDict/dict.sh?cond=%BB%F2&pieceLen=50&fld=1&cat=&ukey=-23510237&serial=1&recNo=8&op=f&imgFont=1

麽 is the traditional version used in the Mainland. This character first appeared in the list《印刷通用漢字字形表》that was published in 1965. Many of the characters in this list have fewer strokes than those that are common in Taiwan and Hong Kong, but they are still considered as traditional characters and not simplified ones. To differentiate them from the Taiwan ones, they are called 新字形 while those used in TW and HK are called 旧字形.

For some reason when I chat in QQ with my friend in Mainland China, he always uses 麽, instead of 么. This is the only traditional character; everything else is simplified. Could that just be because of his text input mask?