Looks like Gazelle's offer just went down to $283. They're convenient if you don't want to use Craigslist, but note that they will always lowball you (since they're planning to resell it themselves).
I sold my original base model iPad for $400 on Craigslist last week ($100 less than I paid). I'm sure you could still get at least $300 now, more if you put in the time to write a good ad and/or offer to deliver nearby.
Hee hee, I knew I should have clicked that button before I posted here. ;)
I find that Gazelle's value proposition has been pretty good, for me. I'm happy to surrender a few dozen dollars in exchange for not having to deal with Craigslist or eBay.
I've got a co-worker who sold his 3gs about a year ago. He said it was a great experience. On seeing your comment I just started the process of selling my iPad 32gb wifi to gazelle. $437, not bad. I won't be buying the 2nd gen. I just want to offload mine before the value drops out of it.
EDIT: Planning on selling mine, so wondering if anyone has used the service before?