RPG design: The Essential Reading List

I'd definitely study the evolution of the hobby using books like The Elusive Shift (Petersen), Role-Playing Game Studies: Transmedia Foundations (Deterding, Zagal) and Designers & Dragons: A History of the Roleplaying Game Industry (Appelcline). Once the students had a grounding in the history I would suggest a unit on Dice and Probability, the Mechanics and influence on settings.

• D&D for level and progression, and contrasting that against Palladium's approach.
• Traveller for the lifepath concept as well as the developing of universal setting.
• Hero System and the rise of point based mechanics, contrasting with GURPS.
• Interlock (Mekton, Cyberpunk) and the emergence of Unified Game Mechanics, maybe contrast with Atlas Games All Flesh Must Be Eaten, et al.
• Vampire, and the development of Dice Pools and the rise of “splats” as a business model.
• Over The Edge and Amber Diceless as differing approaches to non-traditional RPGs.
• Sorcerer, indie games, The Forge, and the story game movement. See also gamist/narrativist/simulationist as styles of play.
• D&D 3.0 and the OGL explosion.
• Apocalypse World and the New Wave of RPGs as a reaction to OGL. (one man's opinion).