I'd shell out the extra $100 for one of the iPad 2 models. I have an original iPad, and I'd been considering getting a second. After seeing the improvements made with the new version, I'm not only pretty sure I will do so, but I'm considering getting 2 of the newest version and letting my nephew have my original model.
I think the cameras alone make the iPad 2 worth the price difference: they open up so much potential functionality. FaceTime (video chatting) on the iPhone is super easy, I suspect that ability on the larger iPad screen will be super cool. Then you have the thinner, lighter design and the faster processor. Before Apple incorporated multi-tasking into iOS, speed wasn't even an issue. I never noticed any hesitation whatsoever - everything seemed to happen instantly. But, now I notice short delays sometimes (though perhaps only because I had been spoiled), so the dual core chip might make a perceivable difference.
Another thing to consider: If you are going to buy mobile data service (so that you have internet functionality most everywhere, rather than just when you are within range of a usable Wi-Fi network), and you want to use Verizon rather than AT&T, you'll probably want to buy an iPad 2. The original version only works with AT&T service, but the new version is offered in AT&T models and Verizon models (you have to get the one that works with the provider you are going to use, they aren't interchangeable). You could use the original iPad with Verizon service, but you'd have to have a separate device to act as a mobile Wi-Fi hotspot.