Well I passed L1, in June and I am well underway for L2. I am all the way to SS5 in Level 2 and getting through economics I will say that what you study for L1 is often the basis for L2 material (i.e. most of economics is application of international as well as macro economics, so you better know both, include F/X).
The nature of the L1 exam means that not every LOS can be studied, not every topic hit 110%. Derivatives are hit in L2 and L3 and are based upon the basics of the L1 material, so I will say know it all. The derivatives is important, especially the options materials, so know that (swaps are EZ in level 1, but without a good understanding swaptions will have you pulling out your hair). Overall the derivatives materials isn't that bad in L1, but of the stuff you need to know, you should learn it pretty well.
Fabozzi is hardcore bonds through and through and all the Fixed Income material is pretty comprehensive. I would say you should know everything for fixed income in level 1, cus if you don't got the basics (pricing, interest rate volitility, yield curves, yield spreads, bond markets, etc), you'll be up the creek without a paddle when you hit bonds with embedded options, asset-backed and mortgage backed securities and you hit Interest rate volitility harder.
*Rule of Thumb* understand all non-optional material. You'll thank me on exam day.