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Gran Turismo 2, without a doubt. When it comes to arcade racing, I'm gonna have to go with San Francisco Rush (though admittedly, I prefer the N64 port since there are no load times.)
Gran Turismo for me too. But I have to say that I also like R4: Ridge Racer Type 4. It's a beautiful racer that has a lot of cool cars. It also has a cool, lighthearted story that would push you to play on. And of course, there's Crash Team Racing, the best Kart game on the PS1 and Micro Machines - a pretty unique racing game.
I would go for Formula 1 97, published by Psygnosis. This game was so good, that even the 98 and 99 games couldn't reach its realism. It was definitely the best Formula 1 game on PS1 and I spent hours playing it, I even managed to complete a full race (70+ laps) with the "Realism" setting once
I'm not too big on realistic racing games, so I can't really comment on that, but I know that Gran Turismo was pretty good. As with other/arcade racing games, that varies, is this limited only to PS1, or PS2 as well? If only the first PlayStation, I would probably have to say WipeOut or Rollcage, those two were pretty big. If PS2 is also in the equation, Burnout Revenge, hands down the best arcade racing game I have ever played.
I never played much racing games on PSX for I grew up with an N64. From what I played I would have to say CTR. I could never get into Gran Turismo or any other racing sim because I am plain awful at them and all I do is spin out of control.
To be perfectly honest, I've never played Gran Tourismo, other than probably getting to test it out a few times, and it never really appealed to me, so take my opinion with a grain of salt. I think for people like me who prefer the only marginally realistic racing games, Burnout and Need For Speed would be the best racing games to play, albeit they were much better in the PS2 versions, but still to me they are perfect racing games that balance out realism and outrageousness at the right balance.
I haven't played any of the games people have listed. The only racing game I have played on my PlayStation is Demolition Racer. I love this game and I still play it today. I like being able to desyroy cars and get points for it. My favorite move is death from above, but thst is hard to do so I don't get to do it very often. I get lots of good points woth that move. It's a shame that they haven't come out with a sequel to this game.
For graphics it would definitely be Gran Turismo. For fun however it would end up being Need For Speed: Hot Pursuit.
I had played racing games for a long time, this was the first time i have ever had an opportunity to run from police. It was extremely fun for 14 year old me
I like Gran Turismo also. That has to be my favorite racing game ever, regardless of any console you are talking about. So much excitement and energy in that game.