It's truly a testament to this album's genius and greatness that this is so hard to choose (we could easily pick the best verse off of, say, I Am...).
In my book, the best verse on the album is AZ's first verse on "Life's A Bitch." Start that track in a room full of real Hip-Hop heads, and most everyone in the room will know every word to that verse without fail. The best verse by Nas on the album? I'd have to say the first verse on "N.Y. State of Mind." When that bass-line first drops and Nas opens with them first bars, everyone of us knew we had stumbled upon something magnificent, that we were hearing the birth of a genius who would go on to help define a generation. Best opening to an album ever.
My other close favorites are his verses on "Life's A Bitch," the second verse from "Memory Lane," and the first verse from "Represent."