In terms of talent, I'd say the best actors around today are Kevin Spacey, Tom Hanks, and Edward Norton. It seems to me that every role they play is totally convincing and you forget who the actor is and believe the character.
Among the older generation of stars, I'd say the same about Michael Caine, Al Pacino, Sidney Poitier, Rod Stieger, Paul Newman, Gene Hackman, and (really going back) Edward G. Robinson.
Now I hate to say this, because I enjoyed all of his movies except for the one where he got pregnant, but Arnold was not the most talented actor. Neither is Keanu Reeves, even though I like the Matrix.
Other actors who are waaaay overrated are Ben Afleck, Adam Sandler, and Ashton Kutcher.