Generations supplants SA1 and 2 for me, mainly because I much prefer 2D Sonic, and thought Generations provided a very satisfying 2D Sonic console experience. The 3D gameplay doesn't quite beat SA1 and 2, but all the extra characters in those games held them back when compared to Generations.
I do admit to enjoying Sonic 4 Episode 1 when it released, but over the few years since release it has slipped to not even making my top ten. I've played it again recently and could just not get into it. Episode 2 was far better, and is probably the reason I began to lose interest in Episode 1, but it still does not crack my ten favorite Sonic titles (2D or 3D). Though were I to name my favorite standalone 2D Sonic games, Sonic 4 Episode 2 would make the list:
1-Sonic 2
2-Sonic 1
3-Sonic 3 & Knuckles
4-Sonic Generations (2D acts)
5-Sonic CD (XBLA)
6-Sonic Advance
7-Sonic Rush
8-Sonic Triple Trouble
9-Sonic 4 Episode 2
10-Chaotix