Ninja Gaiden had the best cutscenes of the 8-bit era. I feel confident I can make that statement and have it go unchallenged. And hell, if there are better cut scenes out there, I'd be glad to watch youtube videos of them.
I recently read a book called "Reinventing Comics"(2000) by Scott McCloud. This book was the sequel to "Understanding Comics." (1993) Both books are fantastic, and I recommend them to anyone with even a mild interesting in the subject; I got my copies at my local library. In these books, McCloud talks about the future of comics, and how technology will influence the design of comics to come. He spends a few panels talking about the possibility of including sound and animation in comics, which I've seen before.
However, McCloud doesn't seem to realize that video game cut scenes were already doing just that. And, to tell you the truth, I don't think I've seen it done better. Animation and sound in comics tends to annoy me, but cutscenes work just fine. Perhaps it's because the comic 'panel' takes up the full-screen, so there isn't a weird contrast when placed next a still panel.
The link I included up top is to a video of all the cutscenes from Ninja Gaiden. While it's fun to view the cutscenes in sequence, there is definitely an element lost. In Ninja Gaiden there are cutscenes before and after ever level. Or Stage. Whatever. It is very consistent. By having it framed against the game play, there is a feeling of a continuous story flow. The high-action scenes are the game play. The talking is done in the cutscenes.
I think in later games, especially after FMV moved in, a lot of it was just done for flash. There wasn't a clean and understandable flow from one scene to another. Abes Oddysee, for example, has some of my favorite cut scenes ever, but they are few and far between, and seem inconsistent in their placement. FF7 was acclaimed for its cutscenes, but I think they suffered from the same problems of inconsistency, and varying quality.
What video games have your favorite cut scenes?