Interestingly enough, the first person to offically complete space flight according to the rules at the time was John Glenn on MA-6, this was actually the 5th flight.  The reason being was that Gagarin parachuted from his capsule during Vostok 1 in April of 1961.  Alan Shepard's parabolic MR-3 ("Freedom 7") flight in May of 1961 didn't achieve the altitude required to be a "space flight" by international rules.  Gus Grissom's flight (MR-4, aka "Liberty Bell 7") was the same way in July of 1961.  Next, Soviet Cosmonaut Gherman Titov piloted Vostok 2 in August of 1961 but once again he parachuted from his capsule (this was standard on all 6 Vostok flights).  In February of 1962, John Glenn flew on MA-6 (more famously known as "Friendship 7")-he achieved a high enough altitude and landed in his capsule.

Of course, the truth behind Gagarin's flight wasn't know at the time and since the Soviets had beated the American's into space-nobody cared if Shepard's flight wasn't quite high enough.

For me,Gagarin will always be the first man in space....no matter if he left his capsule during the landing or not.

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Thats pretty much the belief by everyone.  Gagarin was then and has always been considered to be the first man in space-because he was.  The fact that he parachuted was covered up because it was against international rules, but nobody cares about that anymore (and they probably wouldn't have then).

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Thats one of those many cover-up stroies of the space program.  There are actually a lot of them concerning who was the first man in space.  

The most popular of these concerns a man nammed Vladimir Ilyushin.  Some believe that he made the first flight into space in early April 1961 but due to probelms with the mission it was covered up.  He allegedly crashed his capsule somewhere in China and survived but was held as a "guest" there for several years and later released.  The fact that Ilyushin is still alive (as of 1998, I haven't heard anything new since) helps kep this story somewhat believable although most don't think it actually happened.  Apparently, Ilyushin never commented on it until one day in his old age when he said it was true.  There have been many "investigations" concerning this but none have come up with anything to really support Ilyushin's flight.  In the end, most believe that it never happened.

There is a lot of info here about it if your interested, its a good read: http://www.astronautix.com/astros/ilyushin.htm

Here's another link about "lost cosmonauts".  If anyone can translate the Russian I'd love to hear it.

http://web.archive.org/web/20030610164357/http://lostcosmonauts.com/