The best recent CRPG is Vampire: Bloodlines. I was initially put off by being a Vampire, but it is brilliantly done - at least in my case, you end up feeling and behaving like a vampire. Some of the NPCs are very well characterised - one, Jack, is more vividly drawn in just the tutorial than most NPCs are in entire CRPGs. The side-plots are innovative and far from hack n slash (although the end game does degenerate into that).

Of the older games, the two series that stand out as all time greats are Baldur's Gate and Fallout. They also have interesting NPCs and sideplots, but better combat (especially BG, where the combat is so rich it is like a good squad tactics game) and a more epic, free-form world to roam in. In both cases, the second in the series is the better but there are strong plot reasons to play them in order (plus the improvements in the second will spoil it for you if you have to subsequently play the first).