I find it odd that even though so many posters have voted for No Mercy, nobody has actually pointed out what exactly makes the game so good.
Gameplay
No Mercy had the gameplay that is comparable to even the most current wrestling games. In this game, you got value for your moves. You could target a body part of the opponent and soon you would find your opponent clutching that body part. You perform a submission manouvre on that body part and you could be almost certain of getting a victory.
The same thing could be said about even non submission moves. Even a stall suplex could keep your opponent down for quite some time. You could have a decent 10 minute long match in this game without getting bored for an instant.
Smackdown 2, on the other hand had terrible gameplay. It was as if the spirit of the CPU had been infused with the powers of Hogan, Cena and The Undertaker. The CPU would no sell even the most powerful non finishing move. The Rock had People's Elbow as his finisher in this game and The Rock Bottom as a favourite move, and the Rock Bottom did almost no damage. The same could be said for Undertaker's chokeslam. More often than not, your opponent would get up in an instant. In this game you had a TLC match and even a Hell in a Cell match but they were only cool visuals, nothing else.
You could put your opponent through a table and he would get up in an instant. If your opponent missed a high risk manouvre of the ladder, you would probably expect him to hurt a bit. Nope. He rolled through in a jiffy. You could fall off the goddamn Cell in a HIAC match and then climb up the very next instant as if nothing had happened.
Smackdown 2 was a bit like an arcade game. You performed some moves and kept raising your energy bar till you could hit your finisher. The damage of the earlier moves you had performed on your opponent would not be seen at all. No Mercy was the complete opposite of that. Moves meant much more and were more difficult to perform and the damage sustained would be carried on for the remainder of the match.
With the flexibility of the Know Your Role season mode, there is still probably someone to this day playing in like year 2150 for all we know. It was full of surprises and unlockables galore
Actually Smackdown 2 had a decent season mode only for the first year in the game when you got to unlock guys like Austin, HBK, Cactus Jack and so on. After that it was repititive, boring shit. Most often matches would be made after your character talked trash to some other guy backstage and presto...you would have a match against that guy on that show. You would feud with the guy for one or two months till you repeated the same process with another guy.
No Mercy had a good season mode where you could actually replay some of the classic storylines of the Attitude Era. The feuds in the game were based on classic feuds like Austin/ Mcmahon, Foley/ HHH, Rock/ Triple H, Jericho/ Triple H and many more. The trick is to lose the title at various points of your season mode or it had a chance of getting repititive.
MOD-ability
Another point that goes in No Mercy's favour is that it is easily mod-able and hack able and can be enjoyed even to the present day with newer rosters. Some of it is possible in SD 2 also but the process is much more difficult and the end results are often not good. But then SD2 never had great graphics.
Hey, that's another point for No Mercy.