My favorite games for the 360 in order are:
COD2
Kameo
Condemned
PDZero
Tiger Woods 2k6
Games that I've played but decided to stay away from are:
Quake 4
Gun
NFS:MW
PGR3
Madden 2k6
DOA4
Remember that these are just my personal opinions. I know that people won't like the fact that I don't recommend PGR3 or DOA4, but personally I feel the games don't live up to my expectations of next gen. The jaggies in PGR3 really ruin the game for me, and it doesn't have anything spectacular to make it stand out from other racing games (except for the accurate backgrounds). I actually went to EBGames to buy DOA4, but decided to play it on their kiosk first. I was immediatly turned off by how fake and cartoony everything looked, which I'd attribute to choppy animation and poor lighting. The background scenery is stunning, but the gameplay hasn't changed much since the Dreamcast days. Definatly a rental, but nothing I'd call worthy of my $60.
The games that I recommend are ones that I consider worthy of a full purchase, not just a rental. If COD2 had a decent Live setup, it would be one of the best FPS's of all time. First player is still very rewarding and offers a good amount of replayability. Kameo is next gen all the way. Killer graphics, animation and sounds combined with a creative concept and great gameplay made this one of my favorites. Condemned is honestly a scary game to play. Turn off the lights and turn the sound up, I swear you'll be jumping out of your seat and shouting like a little girly man. The graphics are top notch and the forensic analysis makes it for than just a run and gun game. PDZero is a fairly decent game, although I found the singleplayer campaign to be very unfulfilling and not much fun. The multiplayer however is the best on the 360. No lag and fun darkops games always keep me playing. I also threw in tiger woods 2k6 because I like golf games when I'm relaxing and the courses look like pure tits. The water and grass effects are drool worthy.