I know it's already been said but my favorite is Tifa Lockheart from Final Fantasy VII for a few reasons:
1. The obvious one-She's attractive looking or how the kids say, HOT!! As the first female character to attempt sex appeal in the Final Fantasy series, Squaresoft did a good job in developing a sexy character that not only been in the hearts of gamers, but in countless Hentai magazines in Japan (There's an entire stock of her on a shelf in one comic book store I visited). I was seriously surprisedthat her upper body wasn't featured in Screwattack.com's top 10 boobies list.
2. Despite her sex appeal she does not have that stereotypical damsel in distress or playful hooker kind of personality. If you played the game FF VII, you find out that her story is at first real simple, but then turns itself around during the middle of the game. Her personality is deep and can be categorized as one of those "Girl Next Door" personalities (if I'm using the term right). A good friend with much to do.
3. Like stated before she isn't one of those damsel in distress characters *cough Peach*. If she thinks you're getting annoying or just she doesn't like you, she can kick your ass not with guns, an arm cannon, whips, magic, or a camera, but with her own two hands. My kind of fighter. Also serves as a girlfriend that you might want to avoid during that time of the month.
4. Personal Reasons. She was my most powerful character in the game (Even ahead of Emo Cloud). Speaking of Cloud, their story is sorta similiar to mine and someone else's right now.
Now for worst female character....Princess Peach. But I don't need to explain. Instead I'll let IGN/Gamespy explain: http://gamespy.com/articles/100/1005645p 1.html