The Elder Scrolls III: Morrowind
The Sequel to Arena and Daggerfall
An absoloutly massive world, hundreds of towns, thousands of NPC's, millions of items that can all be picked up and moved, including books, pillows, swords, forks, knifes, shoes, and pretty much anything that isn't nailed down to the floor.
Complete freedom of who you are, what you look like, what your skills are, how you play the game, and even what you do in the game. It has an amazing story, about gods, an ancient prophecy and people generally stabbing you in the back, but you don't even need to follow the story, you could spend your whole time in the game being a theif, breaking into peoples houses at night and taking their shoes.
And on top of the main quest, there's various other guilds you can join, side quests you can do and hundreds of dungeons, tombs and caves you can randomly loot.
Morrowind = best RPG ever. It's only problems lay with it's many glithces that can be expected from a game of this scope. But if you can look past them, the game can seriously last hundreds of hours. It's certainly not a game for everyone, because of it's amount of freedom, some people might just see it as boring. But it's the closest thing there is to perfection.