Reading through the posts, one thing's for sure, Kefka and Sephiroth are two of the most "insert your choice here" villains.
One thing about Final Fantasy games in general is they REALLY make you hate the villain. They really make you anxious to get to them to wring their necks.
From that perspective I think Sephiroth is more successful in doing that than Kefka. Why? in general people will hate more someone who kills their child than someone who kills one million people on the other side of the globe. Sure, Kefka destroys the world, but Sephiroth kills the ones close to you, characters you learn to love. I know it's a game, but I really felt an emptiness when he kills Aerith. Then Sephiroth makes you do a lot of his work than just steals it from you and laughs in your face. I know, Kefka does the same when he uses you to get the Espers, but, I don't know, Sephiroth is more personal. And this is the bottom line: of all villains I fought in 25+ years Sephiroth will always be the one who got most personal.

As far as evil goes, Kefka is probably more evil than Sephiroth, but I think it's unfair to base it just on the lack of accomplishments. Is Bin Ladden any less evil than Hitler? Or was Saddam Hussein any less evil than Stalin?
Now I will give Kefka's fans this: what makes Kefka great is because he just is evil, he just wants to destroy everything, there's no reason behind it, there's no justification. I always tell people: even Hitler didn't wake up in the morning and say "I'm evil and I'll kill people because I'm evil (or because I want to kill people)". In his mind Hitler had justification. Of all the famous villains only the joker in the Dark Knight is evil without a reason. Which I think is the main reason the joker in Dark Knight was one hell of a villain.
As far as the final battle, kefka's one sick bastard, I was a little disappointed with Sephiroth's final battle. But I liked a lot more the end story of FF7 than FF6.

Last, the Jenova/Sephiroth story line is a lot more interesting than Kefka's story line.
So personally I'd vote Sephiroth as the "most" villain, but definitely Kefka comes in a close second and the joker even a closer third.