Delta said:
Shin Megami Tensei is my favorite RPG series. SMT 2, Strange Journey, Nocturne and Devil Survivor being my absolute favorite. I hate the Persona spin-offs. Awful piles of garbage that have swayed Atlus from concentrating on the main series because of it's popularity in the US.
Heavy Rain is decent, it is hardly an art game and a game based around the awful concept of QTEs. It's carried only by the story and interesting narrative.
Shadow of the Colossus is indeed a fantastic game and one of the best on PS2.
Okami I never really got the hang of, but a good game nonetheless.
Journey is brilliant.
Flower is a wind simulator.
Haven't heard of The Neverhood.
Mass Effect 1 is the closest game to art that you will get this generation. There aren't many, I'll admit, but Mass Effect is certainly one of them. It brings up so many questions and moral dilemma's that allows for almost every playthrough to be different. Shepard isn't just another space marine like Master Chief or Marcus Fenix, he's you. You are the main character and you have the power to make all these choices. That makes constant implications on future decisions and games. The Mass Effect series also has amazing music that I don't even need to compliment. Such as: http://www.youtube.com/watch?v=EuXOr1CcZsk
If Mass Effect isn't art then I don't know what is.
I really enjoyed both original Shin Megami Tensei pieces, just like the Persona series (well, I didn't play with the 4, but played with 1-3), and they are really enjoyable even thought they had a really different atmospheres. Heavy Rain is an art game, not because of its interactivity, but because of the emotion and the storytelling you can see. It's an interactive drama, which is also something new in concept. But because of it it wouldn't be an art game. A game is an art game because it has a huge effect on you.
Flower is also another interactive game, even though it's not as effective as the other games I mentioned, it's still enjoyable. Not really an art game, I agree, but one of the most relaxing games I've ever played. And it's also an affection.
I suggest you to try Okami out. Even in the graphics, you can see that it's something unusual, because it's also represent the style of the game. It's storyline is really decent, and also really effective.
The Neverhood is an older game for PSX (and also for PC) and it contains plasticine figures and was made by stop-motion, and from that you can see that we had more art games in the past. Even thought we still have some (Limbo and Datura are also not bad, but not the best, like Flower), they cannot be compared to the details created in older games like Fallout 1 and 2, Grim Fandango, Jade Cocoon, and so on. The difference that currently current developers create everything to become as advanced as possible: realistic graphics, online gameplay, and so on. We still have Indie Developers, but in the past even "bigger" developer teams and publishers created works which can be considered as art, as they create a universe which can be detailed and has its own unique atmosphere, what you explore gladly.
Nowadays, only the japanese video game creators are who sometimes try to create something unique and innovative. For example, I think "Ni No Kuni" won't being sold well at the cashes but will be a really unique game with its own atmosphere and the world of the classical anime movies, as it is made by Level 5 and Studio Ghibli. Of course, some of them (like Square Enix), unfortunately, follow the western trend and they don't risk at all and sell the same s***t since people buy it. They main series are all cliché, but their other games, like Lost Odyssey, are really underrated, but interestingly, were done much better.
For answering your question: For me, Journey is the best art game in the current generation, the next one is LittleBigPlanet. As you can see, most of the other titles, even if they have "HD version", had been made in a previous generation, like Shadow of the Colossus or Okami.
Well, to be honest, that conversation went better than I expected.
EDIT: if I need to choose a game from a previous generation, then it's Shenmue.