You should probably get whatever release is most current (3.2 I think) for your non-gaming needs.
You already have 1.3 selected, which is a decent choice for gaming. However, most games were written for PAL machines and will barf on an NTSC machine.
Also, the older games which need 1.3, might also require stepping back to the 68000 processor, which typically shuts off any accelerator memory. This leaves you with 1meg total, which will be a serious issue if you also have a hard disk, as mounting the hard disk partitions consumes system memory.
I keep two machines, an OS 1.3 1.3 1MB A500 for playing disk games, and an expanded OS3.1 A2000 (accelerator, memory, hard disk) which I used when I was doing development work.
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