I use <h1> for chapters. If there are parts or books, I use <h1 class="part"> or <h1 class="book">. For the title page I use specific formatting with no <hX> tags.
If I used some automatic tool like Sigil to build the NCX, for example, I'd probably use <h1> for the top level and then <h2>, <h3>... But since I don't, I just use <h1> for chapters because each chapter is in its own XHTML file, and there it is the top division.
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