I am a huge Porco Rosso fan, but I think ultimately I'd have to choose Kiki's Delivery Service as my favorite. Everything about this movie is pitch perfect (as long as you do not watch the Disney dub which will make you want to stab your skull with shrimp forks), and Kiki's anxiety and excitement about going off to decide what she wants to do with her life is just as engaging as the obligatory Miyazaki flying scenes.
As for the best Ghibli film, I'd have to say Grave of the Fireflies. No piece of art in any medium has ever so deeply affected me. I remember simply describing the film to a friend over lunch days after watching it and I nearly started to cry. I had to pretend a French fry went down the wrong pipe to cover my voice breaking.
I might be ready to watch it again in a decade or so, but that might be too soon. I saw it described somewhere as "the best movie you'll never want to see again".
Anyway, what do you say?