Don't get me wrong I did enjoy it and I plan to play it again soon, but I don't see why this game is often considered on par with the greats of PC RPGs.
I think the things that fallout does best are the setting and atmosphere. However, IMO, it is subpar in two key areas: story and gameplay.
Story:
I consider story to be the most important part of an RPG, so I was quite dispointed in this category. While a very interesting setting, I was disapointed by the actual story and writing. The characters are all very one dimensional with only a few lines and barely react with changes in the world.
Ex. I kill the master, 5 years later talk to the LT, and the master's death never comes up? (or vice versa). I kill a bunch of people in the cathedral, get purple robes so people accept me, yet everyone treats me the same in the main floor of the church? The brotherhood treats me the same on the first day I walk as they do 5 years later after I've conquered the military base? etc.
BG2, PT, and KOTOR all have riveting conversations that are longer and better written. Not to mention many more NPC's with something interesting to say.
Gameplay:
I already made a thread how I disliked the combat in the game for being unnecessarily tedious. But this can be extended to the entire game with the cumbersome interface and inventory.
In the end, I don't consider this to be on par with the best RPGs, namely BG2, PT, and possibly KOTOR. I was disapointed because I really love the setting (much more than DnD), but as a game it can't stand toe to toe with the best.
Should I give FO2 a try? I hear that the gameplay is improved, but the story is worse, which concerns me. I think I'll try another play through with an evil melee character first though...

Don't expect anything different from the sequel. The changes are superficial. If you did hate some things about the first one, chances are it'll be the same with F2.
Fallout 1 has better story, but i still find F2 to be a better game. I like it's humor, the sheer size of the game and the story is still enjoyable.

In FO1/FO2 defence you have to bear in mind that both of them were developed and released before any other game you mentioned (PS:Torment was done by same studio as Fallout's btw, funny that after that crowning achievement they started producing mediocre games like Icewind Dale 1&2)
If you play FO2, I do recommend either Killap's patch or restoration project. Then again Restoration Project version 1.3 is near release (it's been near release past year or so ;) :P) so you may or may not want to wait for it.

I know, but people often rank it with or above those other games I mentioned. I am talking about the quality of the games today. If we only consider games against their contemporaries, then pong would be the greatest game of all time. I don't think there have have been any newer RPG's which match the quality, complexity, and depth of BG2 and PT. I do agree that it is certainly not ID 1&2 though.
I have to say I'm even more disapointed with my new evil, melee game. There seems to be no difference at all in the world. After rescuing Tandi, I didn't return to shady sands and ended up killing her because she was annoying. I then returned to shady sands to see what the reaction would be. Absolutely nothing. The game apparently just deletes the quest when she dies. So her father just asks me "What's up?", instead of "How is the search for my daughter going?" Which would allow me to respond, "I killed that annoying brat". Followed by a gasp and then a small massacre of a town.
I recruited tycho to 'help clean up the town' and then immediately took him to kill Killian at Gizmo's orders. He didn't complain. Then Gizmo said thanks, please leave. And that was it. etc.
In the end, I'm really dispointed by the story and writing. While the overall main plot in fallout 3 is much worse, IIRC the dialog is much more extensive and npcs are more responsive to your actions.
Though melee is pretty fun. Running around with power armor and the super sledge and the perk for extra movement is pretty effective.

I can't stomach playing evil so I don't know too much about it in various games but AFAIK Fallout 2 is better for playing as villain at least as there are more opportunities and endings will aknowledge at least some of your actions. I'm not actually sure if you can create evil ending for your own tribe or if NPC's dialog or behavior changes due to your evil actions.
FO1 too does have two (sort of) evil endings and settlements probably will also have bad endings due to your evil actions (or lack of action).

Having "I'm looking for my father, middle-aged guy" as the first dialog option for every single NPC in the game doesn't really spell good dialog writing for me.
Give Fallout 2 a shot, it's a much bigger world, lot more to do, more varied options, some interface enhancements as well. Also make sure you install the restoration project as was mentioned before, makes the game more stable to save you some headaches.

OK, I bought this game off the shelf when it was a new release, which makes me old, I know. But you have to think of it this way, the idea of a video game that gave you free will to kill the townspeople for no good reason or save them from their stupid dilemmas had not been done so effectively before. The concentration of this game was on really modifying your character to specialize in a variety of skills, and run them through the gauntlet of the story to see what results you would get. For instance, you get a variety of options based on your high intelligence, high charisma, low intelligence (try playing with a 1 in Int, see what happens), as well as giving you funny random encounters the higher your survival skill is.
Unfortunately there isn't a lot of variety in NPC responses to what you do, a bi-product of the inflexibility of the coding. This was one of the first Black Isle Studios games, as has been pointed out, so a lot of the problems you see here get worked out a bit better in the later games. And yes, it is stupid to think about standing 5 feet from your enemy and exchanging round after round of gunfire, but for it's day this was a revolution from the menu based Final Fantasy games or the turn based strategy games.
Sorry you didn't like it, but I'm playing it again for something like the 20th time, it's old and clunky, but I still love the satisfaction of blowing a hole though my enemy, with the dying scream, and that great wet thud when they hit the floor. Fantastic.

I think it is far more fun if you dont try to break the game the way you described.
FA1 never got the polish to deal with such extreme odd behavior like not returning tandi and running around in the waste for 5 years while ignoring your main quest.
FA2 probably does that better, and every following rpg does that too, mostly by simply ruling such behavior out by making the game more linear. But the highly nonlinear gameplay is what the FA1 and 2 makes so fun.
Regarding the combat system....some people seem to not like turn based games. Some dont like twitchy real time combat. Thats a matter of fact. There is a lot of personal taste involved in that but i often get the impression that it depends on whether you know how to use the system to your advantage or not. I recommend reading some strategy guides or something.