I love Albedo and its really comes down to a toss up between Eps.1, Eps. 3 and Pied Piper in terms of the best entry... granted PP is pretty limited as a game since it is a cell phone game but the story is actually incredibly well written and I advise all Xenosaga fans to read a fan translation of it, especially if you like Ziggy.
In some ways, I like Eps.1 combat the most but Eps.3 has a better leveling system and the best mecha combat of the three entries. Eps. 2 has some redeeming qualities but lacks far behind when compared to the other two. I really feel you can't go wrong with Episodes 1 and 3 and seeing how Eps. 3 retcons quite a bit of Eps. 2 (since its based off the re-imagined version of the plot from Xenosaga I and II for the DS) its almost irrelevant to play Eps. 2 anymore.