Handcent SMS is good if you want a better text app.
handyCalc is a really nice calculator. Aside from the regular stuff it does graphs and solves equations and stuff.
Movies is good if you go to theaters a lot and want to know show times and stuff.
Listen is great if you listen to a lot of podcasts.
All the -oid emulators which aren't on the market anymore, but are pretty easy to find on Google (GBCoid, Nesoid, etc.).
Google Voice is amazing for voicemail, and I couldn't imagine going back to the default phone voicemail.
3G Watchdog is great if you're obsessive compulsive like me and like to know how much data you're uploading/downloading even though you have an unlimited data plan.
If you don't mind paying for it, PowerAMP is a great music player.
Finally, I've been really into Cut the Rope recently, which isn't on the market, but you can get it here:
http://www.getjar.com/mobile/75206/cut-the-rope-free-for-google-nexus-one/?ref=0&lvt=1308938806&sid=ceu5es4ppm8060tg&c=8ju5i9xq0yn1reo113%C3%A3%C2%80%C2%88=en