actually using the N1 is technically considering cheating (at least in my opinion).
the reason is because you cannot earn or unlock the Naboo Starfighter normally in the game, unlike the Millenium Falcon and TIE Interceptor which you can earn normally just by mastering the game.
on the N64, using the N1 is definitely cheating since you can only attain it thru a passcode. on the PC, its a little less clear-cut since you dont get it thru a passcode, you get it through an update patch for the game. but still, either way, you can't earn the ship normally in the game so i would technically consider it to be cheating.
as long as you at least BEAT THE GAME without using it then in my opinion thats fine. if you use the N1 for Golds its not that big of a deal but it is still kind of taking the easy way out. however if you used the N1 to beat levels in the game your first time thru then I consider that kind of on the pathetic side.