This game's story and gameplay are tightly intertwined into an effective and amazing journey.
Your character builds from the ground up on a system of skills like stealth, demolitions, and security, in addition to basic stats like strength, defense and vitality. The force powers are well animated, and being on the receiving end of a force choke makes you truly appreciate how vile the Sith are. The game's puzzles really make you think, and the weapons and armor are fun to upgrade as you quest to find the ultimate combination of crystals for the lightsabers you possess.
Really, though, the best thing about KOTOR is the development of morals your character possesses. Many games claim to approach moral gray areas and give the player harsh decisions, but in KOTOR, the decisions you make mean something that can effect how your story plays out. Today on Tatooine, I ran into a woman who asked me to sell a bone plate for her. Her husband died, and she didn't have a hunting license needed to sell the plate. You can do everything from buying the plate off her at more than full price, to killing her for bothering you, and this decision effects how close you are to being purely light-side or dark-side. This changes your character's appearance and how the move very slightly, and it also changes what conversation options you have available to you.
By the end of the game, you will have shaped a character that is ready to take on Darth Malak. A character that, good or evil, has every reason to hate the self-proclaimed sith lord. The quality of the writing in this game, mixed with the stylish animations, gives me a sense of "badassitude" that you only see in crazy action films, or well-performed shakespeare plays. I would relate the sequences that give me this feeling, but don't want to go shouting any huge spoilers.