I think "Illmatic" is the best hip-hop album ever. Nas is on the list of the best MCs of all time, and the beats on that album are impeccable.
Most of the early Wu-Tang stuff is fantastic, but it's all been mentioned a lot in this thread. A few great albums are under-represented here, though:
Not enough mention of Outkast. "Aquemini" is probably my favorite, but "Southernplayalistic...", "ATLiens", and "Speakerboxx" are all great, too. Big Boi is the most underrated well-know MCs alive right now.
I like the first Snoop album ("Doggystyle") better than any other Dr. Dre project.
Del's "No Need for Alarm" is one of my favorite Bay Area albums. "Deltron 3030" with Automator is even better, though.
The Lootpack album, "Soundpieces: Da Antidote" is another great West Coast album, early Madlib beats.
I also can't believe no one has mentioned KRS-One (especially in the above post about "Boom Bap"). The BDP stuff is classic, but I prefer the albums he did with Primo in the early-mid-90s, the self-titled "KRS-One", and especially "Return of the Boom Bap".
The Jay-Z album I'd put on a list like this also hasn't been mentioned, Danger Mouse's "Grey Album".
The first Goodie Mobb is fantastic ("Soul Food"). The second Bubba Sparxxx album, "Deliverance" is also really underrated (pretty much no one bought it, which is a shame, because it's really good.)
Along with the "official" early Wu stuff (I rank "Enter the 36..." "Liquid Swords" and "Cuban Linx" as the unquestioned classics, with the first ODB album close to that) the original Gravediggaz album ("Six Feet Deep" in the U.S.) is fantastic; can't go wrong with a Rza-Prince Paul collaboration.
In a similar "horror-core" aesthetic, I love the first Jedi Mind Tricks album, "The Psycho-Social LP" (and expanded "Psycho-Social CD").
I also have to mention the 3rd Mobb Deep album, "Hell on Earth", which isn't generally regarded as highly as "The Infamous" but which I think is more consistent.
The Dr. Octogon album is amazing, too (really, really weird, of course, but amazing).
Finally, I have to mention some of the local Minnesota stuff. Brother Ali's "Shadows on the Sun" is great, and there is a ton of very good Atmosphere stuff. I like "The Lucy Ford EPs", "Seven's Travels" "HeadShots: Se7en" and the newest, "When Life Gives You Lemons..."