Id say go Widescreen for gaming, no question really.
Last year I got myself a XBR910, and Ive played a lot of Xbox, PS2, some Gamecube, and even have my PC hooked into this set.
Xbox is by far the most Widescreen friendly of the systems. Contrary to what you heard, nearly ALL games support a form of widescreen. All the best games certainly do. Some games (though few) support some real HDTV resolutions like 720p (Soul Calibur II & X-Men Legends for example). Component video is the only way to go, nearly all games support 480p as well.
PS2 has a few games that support widescreen, though not many. However, playing games with Sony's "Widezoom" mode is good enough for most applications. Some games may have the very edges cropped thus causing you to miss some score details and such. If thats the case, can always just use the 4:3 modes that are as clear as any 4:3 set out there. The component video is crisp on PS2, but you will REALLY begin to notice how nice 480p Xbox games are. Only a few PS2 games do 480p, and some of those arent even widescreen. PS2 will look ok on a HDTV, but may actually appear sharper via traditional sets. (this is because sets like the XBR910/960 dont display interlaced images like an old NTSC set. They always use their line doublers. This can result in a slight blurr for fast moving objects, or a blockier look. Remember how everyone complained about 1st gen PS2 titles being all aliased and blocky like? This problem is to an extent amplified via the line doublers in HDTV sets) Component video will give you much more vivid color over S-video.
Gamecube. Sadly I cant fully review Gamecube. I dont have the ultra rare component cables for the system. However, very few games are HDTV friendly, though more support 480p than on PS2.
Anyway, the REAL reason to go HDTV now is because the next generation of consoles is right around the corner. Xbox 2 may happen as early as next fall, PS3 less than a year after. All the upcoming systems will fully support HDTV, games will have mandatory widescreen modes (like they somewhat already do on Xbox). However, not every game will be 720p or 1080i but probably around 98% of them will still support widescreen 480p at least.
And finally, widescreen is the only way to go for movies. Its the shape of things to come. No reason to put it off with another 4:3 set in this day and age.
-DeathCom