Ah, here is a topic I can really get into!
I always encourage newcomers to the series to tackle them in publication order, to me they have more meaning to them that way. It is not just because I grew up reading them that way, but I think, much like the SW saga, that by reading them in chronological order some of the mystery and awe is lost.
For example, as a kid it was great fun to experience Lucy's wonder as she stepped through the wardrobe and found herself in this fantastic place. Even the lamp post was a fun little oddity that originally remained a mystery until the end of the series.
However, by reading Magician's Nephew first, originally the second to last book, now the first, By the time you get to the Lion the Witch and the Wardrobe, you will already know the origins of Narnia, the wardrobe, and the lamp post. Reading The Magician's Nephew for the first time was kind of a "ah, so that is why..." moment. It is like reading the end of a mystery novel and discovering what was going on the whole time. It explains why the wardrobe transported Lucy, and how different worlds exist, even how the witch came to be in the land.
I often give sets of these books away to friends as gifts, and I always include a list of the publication order and encourage them to read it that way.
Even the movies were being made in publication order rather than chronological order, that says something. Though now that Disney has abandoned them, who knows if we will even get another one.
This debate had been going on even while C.S. Lewis was still alive. I remember reading a letter from him to a little boy who asked him which order he should read them in, Lewis answers that he had not put a lot of thought into it, but concedes that the chronological order may be the preferable order of reading. And now that is the order most newcomers read them in, since newer printings of the books themselves have the chronological ordering on the spine.
EDIT: ripped this off of wikipedia:
Lewis' reply to a letter from an American fan in 1957 who was having an argument with his mother about the order:
I think I agree with your order [i.e. chronological] for reading the books more than with your mother's. The series was not planned beforehand as she thinks. When I wrote The Lion I did not know I was going to write any more. Then I wrote P. Caspian as a sequel and still didn't think there would be any more, and when I had done The Voyage I felt quite sure it would be the last, but I found I was wrong. So perhaps it does not matter very much in which order anyone read them. I’m not even sure that all the others were written in the same order in which they were published.