G1 is definitely my favorite. Maybe not every set was a winner (Drink 'n Wet babies, ugh), but there was so much variety and so many beautiful ponies.
G3s are my second favorite. They looked appropriately pony-ish and I loved their ears, but their heads were overly large in a lot of molds, I hated the heart/star in their eyes, and the lack of unicorns and pegasi means they can never be my favorite generation. (Out of hundreds of ponies, only seven unicorns? And not a single baby unicorn.)