First of all, I think the best design is not only by looks but by convienence. And the first generation was the worst due to the actual wheel physically moving. The second generation and fourth generation are almost the same. However, the integrated buttons of the fourth generation are clearly easier than the second gen's buttons being on the OUTSIDE of the wheel, whereas the fourth gen is IN the wheel. So, the 1st and 2nd gen are out.
The fourth generation is more compact, which is pretty cool, but I personally like the third generation the best. The fourth is better for like cases, etc. but its annoying to have to hold down the wheel to click a button. The third generation iPod is touch sensitive so you don't have to press anything. Plus, it has the best layout design of all iPods. Obviously, left is BACK and right is FORWARD, but the way menu and play are placed make it really easy to navigate. Plus, having the wheel all by itself is amazing. And it brought the dock/connector. But the best part is the red backlight of the buttons.
By looks, however, the fourth gen looses because its pretty ugly. And the 1st and 2nd gen loose because the buttons stick out. The third gen is hot and the best iPod ever. Plus, the buttons turn RED. Thats sick, dude.