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Which had the best setting?
Xenoblade by far, followed by Xenogears

Which had their best characters?
Xenoblade by far, followed by Xenosaga 3

Which had then more likable characters?
Xenoblade

Which had best battle system?
Xenoblade by far, followed by Xenosaga 3

Which had their best environment?
Xenoblade by far, followed by Xenogears

Which had the best OST?
Xenogears, closely followed by Xenoblade

Which was the best overall?
Xenoblade by far, it plays in another league and is the best JRPG of last generation. No PS3 or 360 game comes even close and I also don't know any PS2 JRPG that does. The game is in my JRPG Top 3 of all time, right after Chrono Cross and Final Fantasy 8 and before Dragon Quest 5 PS2 and a large number of SNES games.