Uhm, let's see...
Well, probably it isn't "the best" level I've ever played in my life, but the last one from the arcade version of Wonder Boy in Monster Land is simply magic, with that OST, the need to make the right choice in going through a passage instead of another, the need to fight all of the previous bosses once again....
Awesome, sooner or later I'll made some nice videos from my monstrous arcade skills :-D

The best level in recent years that Ive played would have to be the Chernobyl flashback in Call of Duty 4: Modern Warfare. Some of the most emotionally breathtaking moments Ive ever seen! In past years though, would have to have been the first level of Rebel Assault 2, I loved that game! If we could see the old lucasarts stuff on GoG it would be great! Im hoping just like everyone else here that will happen.

Last level of Painkiller, I think.

Already mentioned:
Citadel from HL2
Ravenholm also (so scary first time)
Hotel from VtMB (also scary without FEAR's silliness)
Something from me:
Vault City from Fallout 2. After seeing tribal village, ruins of klamath and den and dirty village of Modoc, the very first time Vault city was simply impressive.
Navarro Base in F2: Base full of enemies and you walk freely. I was freaking out. I remember just wanting to leave the place as soon as possible.
Surface Tension in HL1. you meet soldiers for the very first time.

Surface Tension in Half Life... ahh... good memories indeed.

The falling ship level from Jedi Knight.
Half of its awesomeness didn't come from the level itself, but the cutscene that happened just before, and the voice of the jedi echoing through your head. First time i played that level i thought the ship was spinning, ran around like a headless chicken and died... i was too freaked out to actually know which way was up.
Sabotage at Soulforge from the end of Thief 2.
I know everyone rates shalebridge, which wasn't bad, but the final levels from Thief 1 and 2 were awesome.
Anything from psychonauts.
Seriously, any level from that game is better than most other games combined. Its impossible to pick a best level.... but Gogglor and the Milkman ones stand out.
Mom's Computer from World of Goo
Cos i just played it and it made me laugh.
Blowing up the bridge in Terminator Future Shock
it's scale ws pretty amazing for the time.

Already listed: Ravenholm from HL2, Amateria from Myst III
Surface Tension from the original Half-Life is pretty good (especially the cliff section), but I think my favorite HL level was an earlier one, where you have to fire up a rocket engine to kill a bunch of those tentacle enemies. Especially that giant fan thing, which for some reason is still one of my most memorable gaming experiences.
Thinking about Amateria, there are a number of Myst worlds, from the original on through, that were absolutely breathtaking (and one of my favorites remains the Selenitic Age from the original). I do wish there were more Myst-type games out there, puzzles or no puzzles - just a game where you can wander around and take in an incredibly beautiful, detailed environment.

I completely agree. Half the fun of the Myst games seems to be walking around a world that used to be populated. The intricate environments are just fantastic. I think my favorite from the original Myst is actually the Stoneship Age, though. The music was eerie, the land was beautiful and sad, and the colors seemed bleak, but realistic.

Pretty sure that was just a sign of Achenar's tendency towards violence.

Pretty much any levels from Doom, Doom 2, and Duke Nukem 3d were classic in my book, I played those games so many times back in the day.
Also recently mentioned was the Ravenholm level from Half Life 2.

Duke levels were cool, but weren't really standouts in my book.

Medal of Honor - Ohama Beach... damn epic.

UT2004: DM-Morpheus

While it's not really a level - I love the Gnome areas on RuneScape :>