How to click first link in list of items after upgrading to Capybara 2.0?

You can just use:

first('.item').click_link('Agree')

or

first('.item > a').click

(if your default selector is :css)

Code in your question doesn’t work as:

within ".item" do
  first(:link, "Agree").click
end

is equivalent to:

find('.item').first(:link, "Agree").click

Capybara finds several .item‘s so it raises an exception. I consider this behavior of Capybara 2 very good.