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I think all the games in my three favorite series: MGS, RE, and FF all excell at storytelling.
I would even put Kojima's best right up there with the best of such widely acclaimed graphic novelists as Frank Miller.

I do think Japanese games tend to have better stories than American games because of the way that education works in both countries. The Japanese education program seems to create better all-around students; while in the West, there is much more emphasis upon increasing students ability to do well in one particular area once their strongest points are discovered and this could have quite a bit to do with the quality of storytelling in Western games whose storylines at best only tend to rise to the level of Sci-Fi channel Saturday night movies because the ones with the know how to create computer games aren't English lit majors while the ones writing the best novels -- Stephen King -- don't have that much experience with programming computers.

 

       The best stories in Western games that I've seen during this generation are Ratchet and Clank Future, Uncharted, and Heavenly Sword.



My most anticipated games:  Whatever Hideo Kojima is going to do next, Final Fantasy XIII, Final Fantasy Versus XIII, Gran Turismo 5, Alan Wake, Wii Sports Resort.  Cave Story Wiiware.

http://www.youtube.com/watch?v=zqqLMgbtrB8