Based on how I felt about them at the time.
3rd was pretty much the "first" generation for me. I'd experienced games in arcade and Atari but playing them on the Nes was like finding out that there was a world outside of my own house. The possibilities were endless.
4th was when all of the stuff I experienced in the previous gen were refined to perfection. Not only that, new boundaries seemed to be pushed every month. A great time to be a gamer.
5th was like a rebirth of the 3rd. I'd experienced 3D gaming before but this was when 3D worlds became realized and everything felt new and innovative again.
6th was when the crude steps of the 5th gen finally became fully realized. People looked like people. Games felt like living worlds. Developers finally realized what they needed to do with the right analog stick.
7th felt like a prettier version of the 6th gen....but then the online experience exploded. Suddenly, I was up against the entire world and not just the few gamer friends I had (most of which aren't gamers anymore).
We'll see what the 8th gen has to offer in due time. I'm liking what the Wii U is offering but it's not a quantum leap, yet.
And, to answer the OP, my favorite gen would have to be the 16-Bit era. Everything was so fresh. Music was crisp, 3D was new, games always felt like they were pushing the boundaries and my imagination was captured. I guess I was just at the perfect age during that period. Everything gets better and better every gen (despite what I say, the 7th gen was fantastic for me!) but the 4th gen was like experiencing Star Wars for the first time.
