We report a study of the isotropic-nematic (I-N) transition in fluids of molecules interacting through the hard Gaussian overlap (HGO) model. This model is computationally simple and shears some similarities with the widely used hard ellipsoid (HE) fluid. The I-N coexistence properties of HGO fluids have been accurately determined by combining different simulation techniques, including thermodynamic integration and Gibbs-Duhem integration for various molecular elongations, kappa, in the range 3 less than or equal to kappa less than or equal to 10. The accuracy of the Gibbs-Duhem integration scheme has been independently assessed by locating the I-N transition using the Gibbs-ensemble simulation technique for the largest elongation considered here (kappa =10). The simulation results are analyzed within the context of the simplest version of the decoupling approximation as introduced by Parsons and Lee. The agreement between theoretical predictions and simulation data might be considered satisfactory, particularly for large nonsphericities. A comparison with the simulation results for the I-N properties of HE fluids shows that there exist large quantitative differences between HGO and HE fluids in this region, and this is ascribed to the larger volume excluded by a pair of HGO molecules compared to that of HE. In the light of the results presented here, approximating the distance of closest approach, or the excluded volume in the HE model by the corresponding expressions borrowed from the Gaussian overlap approximation-as is implemented in some theoretical descriptions of the HE fluid-does not seem to be appropriate.