Wow this post really made me think. I've been playing racing games from a young age but I think my first proper sim experience was in the Mosler MT500R in the gtr evolution demo, or at least that was the car that made me want a wheel and Race07 and its expansions. That car on whatever track the demo had got me hooked. I crashed repeatedly using a keyboard until I managed to actually go around the track successfully.
Before that I played some racing games that were sim-like, but hardly realistic. There was Codies 1nsane, Grid 1, Xpand Rally, and early Gran Turismos. I had fun with those but once I tried a proper sim I couldn't look back. It has actually ruined my appreciation of arcade games with the exception of Mario Kart like games and destruction durby type games.