The LC and LC II are painful with most any game due to the crippled bus and slow CPU. There were 68030 upgrade cards available for it via the PDS slot to bump it up to 25/33 MHz, but you were still limited to 10 MB of RAM and lost the ability to have an ethernet card. The only two LCs in the pizza box style case you'd really want to get is either an LC III or III+. The difference between the two is the former has a 25 MHz CPU while the latter has a 33 MHz CPU. Though you can "chip" an LC III to run at 33 MHz with a slight motherboard modification and adding a heatsink to the 68030.
With any of the pizza box LCs, you're pretty much limited to simple 2D games that don't make use of heavy graphics. 3D games are pretty much out of the question unless you want to run in a tiny postage stamp size window at slideshow frame rates.
PowerPC chips can't run 68k code without use of an emulator. Mac OS had a built-in 68k emulator for itself and applications, but there was a huge performance penalty. You generally didn't notice this in desktop applications, but games would run like molasses. An easy way to demonstrate is get a copy of Duke 3D Atomic Edition for the Macintosh which has both PPC and 68k binaries. Try running the 68k binary, it will take forever to load and give you like 1 frame a minute.
Top stuff, thanks! So which 68k model Apple would you favour for gaming? I'd like to acquire a different Apple for each major chip evolution (so one for 6502, one for 68k, and one for PowerPC)...