If I had to narrow it down (in alphabetical order of author name):
I think Core by Frederik Andersson is the best "normal" level; that is, it uses custom material very sparingly. Its environment is very well-constructed, and everything fits together.
Harvest by Farik is the best plot-oriented level, and it too has a coherent environment which expands over the course of the level. (If Noi ever finishes Etherworld, it would be strong competition for best plot level.)
Jerom's Knytt 8-bits is excellent at adhering to its concept. The screen layout and black-and-white thing are kept up from start to finish, and the level itself is very good at evoking the games it's inspired by.
Teenhmifnoeafgil by KG is very impressive in its sheer size and scope. The many endings all fit in, too.
Riku Island by Khodi is the best environmental level. It stays simple throughout, and it works.
The Life Ruby by RangerX sets a very high standard for custom levels; it's designed seamlessly and the graphics (and music) are uniformly excellent.
The Cube series of levels by TheRealTJ are the best puzzle levels yet.
There are, of course, many other fantastic levels: I've just listed the very best of the best here. Of course, all of this could change. As mentioned above, the Etherworld series could trump Harvest. (Maybe.) The Life Ruby really does set a high standard, and it might be a while before it's surpassed. I think the puzzle level has yet to be made. Challenge levels are very diverse, and I can't really choose an overall best.
Of all the levels I've played, there are some I love and some I hate, and then the rest fall somewhere in between- not good enough to be on my favorites list (or the top of the list, as here), but not bad enough for me to reasonably dislike (but of course, this isn't a least favorites topic).