Hard Rain is underrated as hell. I love how he just makes thigns into hard-rock, and that crazy like, reggae-metal version of 'Shelter From The Storm.' I think I heard somewhere that Sara was at the side of the stage during this gig, hence him being so angry. To the person who didn't like it because it's different... THAT'S THE POINT. Dylan has always done this. And if it was exactly like the album version it'd be boring as fuck.
I think his best live album is Live 1966 from the 'Albert Hall' *cough*. The 'Judas' gig. Amazing stuff on there. The Highway 61 stuff on there, I still prefer the version of 'Just Tom Thumb's Blues' to the album version.
As for his best album... I'd say as far as flat-out best, it's Blood On The Tracks. There's one song on it that I occasionally skip, and the rest I just love front-to-back. If you want a great representation of the guy, I'd say Bringing It All Back Home because it perfectly bridges the gap between the weed-and-folk and speed-and-rock eras.
I also love Desire, because I love how unique it is in his catalogue. I think it's got a very lush, full sound for the time - and 'Isis' is my favourite ever of his songs.