Before any fanboy jumps to crysis, uncharted, killzone,Halo Reach, I would like to mention that your question is very complex. Graphics can be viewed from technical, artistic and optimization standpoints. And there will be one/mutiple winner(s) if we view from one standpoint. It is impossible to pick up a single winner.
If it we view from technical standpoint, I would like to say Crysis, GTA 4(for it's scale), GranTurismo 5, Unchrated 1,2, Lost Planet, etc.
On artistic standpoint Prince of Persia(2008), Flower(PSN), Okami(Wii).
On optimization standpoint Uncharted 1,2, God of War, Resident Evil 5