Even if you want to do gaming, I think the ipad 1 is a decent enough choice depending on how intense you plan on getting about it.
The iphone 4 with A4 processor has been out for how many months, and yet only recently the games are starting to take advantage. And that's only a few games. And even with these games, most are able to run on the iphone 3gs.
I bought mine used to be a a textbook reader, but when I got it I realized that even at $300 this was no low quality device. I was horrified that I almost spent $250 on a Nook Color when the iPad was so much more refined and useful. I even had the opportunity to test out the Xoom in BB next to an iPad one, and I now find myself very discouraged about the competition iPad will receive. While I liked the physical design of the Xoom better, even if it had been the same $300 has my iPad I would have chosen the iPad. Even the first gen feels like a very refined device by comparison.
This is coming from a Windows user, btw. No apple-centric bias. Right now iPad 1 feels like the best value, especially if you can find one in good condition. Just make sure you get a screen protector on it, that makes all the difference.