Xenoblade in every catagory.
Best Setting: how about two lands that are made of Gods!
Best Characters: I liked the personality and designs of Shulk > Fei Wong, Fiora especially mechon Fiora >>>>>>>>>> Elhaym,
Riki >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Chu Chu, Dunban > Citan, Reyn > Bart, Sharla > Emeralda...
Actually, if you want to know, I like the characters near the same and could see people favoriing either, but Fiora and Riki should put people over the top for Xenoblade. They were AWESOME!!!
More likable characters: Blade
Best battle system: Blade, Gears had a nice combo input design, though there were so few that the battles became very repetative. You'll use triangle, triangle, square 90% of the game for the rarely dodged special attack. While in a Gear you'll use X to charge a combo point, then triangle, square. Rinse, repeat.
Which had their best environment: C'mon, Blade easily.
Which had the best OST: Tie
Best Overall: Xenoblade
If you're wondering why I didn't compare Xenosaga, it's because that game is a badly paced mess with terrible character designs. In my opinion of course.