Do you know if Windows Phone 8.1 devices are fully backwards compatible with Windows Phone 8 and Windows Phone 7 apps?
Also, would you say that the 512 MB RAM in the Nokia 520 affects the number of apps you can use? I read a little on how certain apps and games require at least 1 GB RAM to be able to download the app/game on the device. Did you ever encounter this problem? If so, I might just take your advice and get the Nokia 640 during Black Friday or whenever it goes on sale, so I don't have to worry about RAM compatibility.
I'd only use a no-contract Windows Phone for gaming & achievements.
I'm almost 100% sure that 8.1 is fully backwards compatible with 8 and 7 apps. I suppose it might be possible that some WP7 apps don't work properly, but I doubt it and even if there are some they would be extremely rare. Maybe some apps that are directly related to the features of the operating system, but I really don't think any games or anything like that are incompatible.
Yes, it is true that some games require at least 1GB of RAM and can't even be downloaded on the Lumia 520. I'm not sure what percentage of games are 512MB-incompatible, but they certainly do exist. Many of them are Xbox-enabled too, meaning that you would need a device with 1GB RAM to maximize your achievement-getting capability.
Even for games that are compatible with the Lumia 520, some of the more graphically intensive ones don't run all that well. I would assume that you would generally have a much better gaming experience with the Lumia 640, due to not only having double the memory, but also a better processor. This is not even to mention the far superior screen on the 640, which is an inch larger, has a higher resolution and pixel density, and has ClearBlack technology.