When gadget makers come out with a new version of a popular device, it often forces fans to decide if they want to shell out for an upgrade. But for bargain hunters, it can also be an opportunity.

Case in point: The new Kindle electronic book reader from Amazon.com (AMZN) . Much anticipated by Kindle devotees, the second-generation model ships this week at a price of $360 (the first Kindle originally sold for $399, but the price was reduced to $359 in May). And because some of those devotees are ditching their old models to help defray the cost of the upgrade, used models of the original Kindle are starting to pop up on sites like eBay (EBAY) and Craigslist in many cases for just $200.

For our review of the Kindle 2 and competing digital reading devices, click here

It s a common phenomenon in the world of gadgets, where manufacturers come out with an endless stream of upgrades partly meant to attract new customers, but also aimed at fans who are willing to pony up the full retail price again to get the new features. The previous generation of iPod Nano, for instance, can be found on eBay for $84 (used) to $126 (brand new), while the current iteration goes for $149. If you don t need the latest model of digital camera, you can get a year-old model like the Canon PowerShot SD870 IS for $160 (used) to $229 (new), saving at least 25% over the $300 price of the latest SD880 IS.

Regarding the Kindle specifically, auction tracker Honesty.com pegs the average selling price of a Kindle 1.0 as a bargain once prices dip below $260, less if the device doesn t include extras like a spare battery or charger.

Prices are better still on classified ad sites like Craigslist, although the number of listings is much lower. New Yorkers offered 15 first-generation Kindle readers for sale, asking as little as $180. Most prices settled in the $200 to $225 range. But the best deals can be found on eBay, where we spotted several Kindles with opening bids of less than $150, and a few Buy-It-Now options for $225. Even the heavily bid-on auctions rarely close above $220.

According to Rob Enderle, president of technology advisory firm Enderle Group in San Jose, Calif., shoppers shouldn t pay more than $200 for the first-generation Kindle. Between $260 on the old one and $360 on the new one, I d pay the difference and get the Kindle 2, he says.

Those who wait another month could see the price drop $20 to $40 further, as more used devices enter the market, he says. Many consumers wait to have the new model in hand before selling the old one.