Gotta go with the original. As dated of a game as it is, it just defines everything great about the series as a whole. Or maybe I'm just sentimental for my first SH experience. Who knows. It's funny how things like the "fog of war" effect, which were originally used just because of graphical/data limitations, worked so damn well to make the environment so much more unsettling. The grotesque -- yet familiar -- surroundings upon entering the "otherworld" were typically vague, due to low-end graphics, but at the same time, I think that kind of worked in its favor. If you really want to scare someone, leave things up to their imagination. Give just enough to set the gears in motion, and let the player's mind take over from there. I think that kind of mindset, whether intentional or not, is a large part of the scare factor in these games. The soundtrack was largely lacking in "actual" music, instead opting for various unnerving noises -- sometimes subtle, and other times very prominent. But it was more than just background noise; it was suggestive, and that brings me back to the point I was just making.
...Bah, I could probably go on and on, but really, a lot of what I'm saying applies to the series as a whole, and thus doesn't quite back up my favoritism of the first game. I suppose that brings it down to the story, then. The whole "family vacation gone horribly, horribly wrong" scenario. Car accident. Well, that sucks. Middle of nowhere. Bah. But then things start to get weird... then mildly disturbing... and then, suddenly, downright horrifying. (I'm looking at you, creepy dark alleyway.) ...And then just weird again. There's a great deal of mystery in the air. Your daughter, this town, subtle hints about other matters... Facing the eternal nightmare of ****** (for spoilers' sake) just... has such a more powerful effect than the "otherworld" of the other games, I think.
The first game really just did such a great job setting the bar for subsequent installments in the series. Each title has its own merits on top of the overall Silent Hill "feel," but I just can't help but feel that the first game just... "did it right," to put it vaguely. (Sorry, I suck at pinpointing the finer details of my opinions, heh.)
I think, for the most part, I'd say the overall quality stooped a bit with each game that came out, most noticeably after SH3, but as I just said above: each game has its own merits. I've played all of them except Book of Memories (which I had no interest in, heard was terrible, and am not sure why they thought it was a good idea), and have genuinely enjoyed them all for their own reasons, regardless of any comparisons between them. I usually make a point of playing/replaying at least one of them around the Halloween season, during my "horror-thon."
On a more general note, as I consider myself something of an SH veteran, if anyone's got questions or anything about any of the titles, I'd be glad to share/discuss. ^^ Aside from Book of Memories, the only one I can't really say much about is Shattered Memories, as I haven't gotten around to completing it just yet. (Got it for my PSP and was playing it on and off for a while.) (Edit: Oh, and The Arcade. Kinda surprised you even listed it here, given the limited release/access, not to mention what a departure it was from the rest of the series' style.)