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GameOver22 said:

I'd go with Bioshock. At first glance, the main story arc seems simple, but there is a lot going on underneath the surface. On top of this, the audio dialogs effectively tell another story about the rise, fall, and continuation of Rapture. Overall, it is one of the most fully-realized worlds I've encountered in video games.

I also liked how the story was told. There are very few cinematic sequences, and almost everything is told in real-time through audio dialogs or radio conversations. The game doesn't really shove its story down your throat, but there is a lot there for those who are willing to look.

This, 100% 

Definitely Bioshock; the best story and it's told so well without the use of any cut-scenes.  Even just looking at some of the rooms reveals what happened there.

Additionally, the big twist in the game ("Would you kindly?", who you really are and Atlas' true identity) are unquestionably the best story elements I've ever experienced in a game thus far.

As far as pure cinematic presentation though, I'd give it to MGS4 for its incredibly directed cut-scenes, and Uncharted 2 for the exceptional voice acting.