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It would be better to take algebra I again to gain a firm base of understanding. It is better to be successful in a class you are taking for a second time than to be less successful or unsuccessful in a class you are not prepared for. Most college entry boards will see that you passed algebra I the first time, and will assume you felt you needed a better base of understanding (hence taking it again.) This will be beneficial to you, because they will see that you are a serious student willing to do what it takes to learn and progress successfully at your own pace.
As a middle school mathematics teacher I have been through the entire calculus series, but I still take algebra, geometry, trig, etc during the summer to refresh my memory. It never hurts to repeat a course, especially if it will help cement the concepts and better prepare you for more advanced work.
Take Alg 1 again. You took it in 8th grade so it is not on your high school record. You will not look stupid to colleges. Just pay attention, do the work, ask questions, so that next year you will be ready to take Alg 2.
Try to prepare and go for it...here is a site for you:
http://www.algebra.com/
Good luck!
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