It's great that you're thinking about trying again after such an awful experience with your first - but although we're always being told how much better breast milk is, it's equally important that you are happy and able to enjoy those first few weeks, so you really shouldn't feel guilty if you find that you can't do it - i'm sure your baby would be just as happy with formula and a mum who's not stressed. You're obviously a very caring mum who wants the best for her kids, and so whatever you choose to do I'm sure they'll be happy and healthy.
Having said that, some babies do seem to find breastfeeding easier than others, so you may start it and find that you have no problems with cracked nipples at all. I'm breastfeeding my son and had a very painful crack on one nipple, and I used to want to cry every time I was about to feed him from that side (I was so lucky it was only one - I don't know how I would have coped if both were bad), but I used to pump that side when the breast was really full (when he'd have problems latching on) and give it to him from a bottle, which helped it to heal quite quickly (also thanks to huge amounts of Lansinoh!)...so you could always think about getting a pump just to make things easier if you are in pain and really want to give your baby breast milk.
Either way though, you should do whatever you are going to be comfortable with, so that you can relax and enjoy your baby!
Hope everything goes well with your pregnancy!