The trouble is, I think that there are so many great graphic novels out there, and they all have their merits. As just mentioned the Sandman series are stupendous; but so are The Watchmen, Preacher, Pride of Bhagdad and countless others that deserve a mention. Many of these graphic novels have won the highest awards in the comic industry and rightly deserve it. But as far as I know only one has stepped outside of the field and won a Pulitzer - and that is MAUS
I've just finished reading it, and I've been swayed. The art is very different to most comics, but it suits the story perfectly.
Best graphic novel: MAUS
If you have not read it, read it before saying no!