I think Demon's Souls is the best RPG of this gen, and probably the best game overall. It's systematically innovatve, and defines how technology, other than graphics, is capable of progressing game design. Not only in that respect, but in how the core logic interacts with / reacts to the player via "World Tendancy".
From Software really took some conventions and tossed them to the wind; they opted to go with their own bold interpretation of the genre. It doesn't hurt that the combat is engaging and perfectly balanced, either!
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The games that I've played the most are Oblivion, Killzone 2, Gears 1, and Demon's Souls :P.
Edit: After Demon's Souls, my favorite game this gen is Metal Gear Solid 4. I don't think another game offers an identical variety in physical control over your character / perspective, measure of interaction with the environment / AI, and to a lesser extent, custom progression. It's also cool, humorous, serious, and wacky, all while offering the best fan service ever, for a game. It concludes a ridiculously memorable legacy of interesting characters, plot(s), and play designs!
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