I play a fair number of RPGs. That is to say: nearly every one that comes out. Unfortunately, the number of entries in the genre this generation that I feel merit a recommendation is scant at best. Final Fantasy X, Wild Arms 3, Shadow Hearts 1 & 2, Digital Devil Saga, Okage, and Dragon Quest VIII are the extent of it. The PS2 is over 5-years old and has barely been able to maintain one good RPG per year. A quick reflection on the number of PS1 RPGs I feel merit playing makes for an even more depressing case: Final Fantasy 7, 8 and 9, Valkyrie Profile, Persona 1 and 2, Wild Arms, Suikoden 1 and 2, Grandia, Lunar 1 and 2, and do I really need to bring up import-only entries?
I feel that dearth of product is largely due to what I consider to be a lack of understanding on the part of modern designers. For whatever reason, it is believed that the qualities that make an RPG desirable are the concepts of levels and a story. Most other hallmarks of the genre, an over-reliance on cinema and sweeping soundtracks, are not considered to be unique. Above all, the idea behind a turn-based, strategic battle-system seems to have become anathema to the modern RPG. A pervasive idea is that games such as Final Fantasy X do not require quick response times and are therefore less exciting is impressively prevelant. Nor does such a game offer a so-called believable abstraction of combat, and this is therefore a detriment towards such a style.
As evidence I present the unending flood of brawlers posing as RPGs: Star Ocean 3, Radiata Stories, Kingdom Hearts 1 and 2, Tales of Symphonia, Tales of Destiny 2, Tales of the Abyss, Tales of Legendia, Rogue Galaxy, .Hack 1-4 even Final Fantasy 12 and Devil Summoner Kuzunoha Raidou. How does taking a terrible brawler and adding in a useless leveling scheme along with amazingly incapable A.I. constructs qualifies you as an RPG?
The appealing thing in a turn-based system is the amount of flexibility and depth of strategic possibilities that it is capable of giving to the user. Suikoden allows you to explicitly control 6 party members. Baldur's Gate allows you to give general hints to 6 characters who may choose to execute your actions by first sojourning around the map. The idea behind levels and RPG-styled character development is at its most enjoyable when it is an integral part of the gameplay. Mindlessly mashing the X-Button in Tales of Symphonia doesn't become more fun when your character starts to animate differently, it reinforces the fact that this game is hollow. Having status-ailment-inflicting skills in .Hack is useless because you are not capable of controlling the timing of how those attacks are brought to bear.
Simply put: a traditional turn-based RPG system is a halfway point between the random frustration of Kingdom Hearts and the micro-managing of a strategy RPG such as Disgaea. However, turn-based RPGs can offer something that a strategy RPG can not easily provide: exploration. Sure, Disgaea could give you a giant map to explore, but if it was filled with random encounters it would be so time consuming that it would cease be much fun. Similarly, a lack of combat opportunities would starve the feeling of danger and high-adventure that accompanies a deadly trek to the edge of the world.
It is Dragon Quest VIII that best exemplifies this notion. Battles are completely turn-based, your four party-members vs. up to 8 enemies. A deceptively deep skill accrual system helps to ensure that unless you like mindlessly leveling up for hours at a time, that you will learn to balance your parties equipment, skills and even strategy to progress. It may not be adrenaline-inducing, but it is amazingly engaging. So much so, that even after a 68 hour playthrough all I wanted to do, was to start over and play the game again. To see what skills and play-styles I may have missed. That's an incredibly rare feeling to have after finishing an RPG.
The world of Dragon Quest VIII is enourmous. It is thoughtfully put together and gorgeous. Battles are frequent and deadly enough that there exists a sense of danger at all time, yet not so time-consuming and frequent as to impede one's desire to explore. It is nearly seamless, towns appear as there actual size on the world map, and you can see for miles around you. The sense of scale and wonder is something that is prevalent throughout the game.
It are these two elements (a fast, flexible, strategic and controllable battle-system that is coupled with a vibrant, expansive world that encourages exploration) that together help propel Dragon Quest VIII to the upper echelon of gaming. They are of course assisted by a compeling, fully-orchestrated score, amazing visual aesthetics, and unique, believable characters.
This is, without a doubt, the finest RPG created this generation.