My nominees:
Kefka (Final Fantasy VI) - His impressive resume speaks for itself. He might be a clown but he makes other villains look slapstick.
Albert Wesker (Resident Evil series) - Few villains have the credentials of Mr. Wesker. At 17 he was already one of the leading minds in his field and in his 20's he worked his way up to be one of Umbrella's top agents proficient in martial arts, marksmanship and undercover ops. THEN he got superpowers.
The Joker (Batman: Arkham series) - When describing why Joker deserves to be considered one quote comes to mind. "When villain's want to scare one another they tell Joker stories".
You (KOTOR series) - I consider the first KOTOR game to be one of the most epic stories in gaming history. That said if you go the (Dark side) route it can be even more compelling. The entire feel of the game shifts and a story of redemption quickly becomes the rise of the greatest Sith lord in history.
I still think forcing Zaalbar to kill Mission is one of the most evil acts ever available to a player character