My favourite film on the Video Nasty list is Possession, an intense, surreal black comedy about the breakup of a marriage starring Isabelle Adjani and Sam Neil. It won several awards at film festivals around the world and is proof positive of what a bunch of idiots made the decisions of what to ban. Next up are Inferno, Dario Argento's typically incoherent if visually stunning sequel to his horror classic Suspiria and Mario Bava's ultra stylish proto-slasher Twitch of the Death Nerve. Each of these are genuinely great films.
I'm also rather fond of Argento's Tenebrae, the three films by Lucio Fulci, especially The Beyond and Paul Morrissey's Flesh for Frankenstein.
Visiting Hours, Dead and Buried and Funhouse were rather tame mainstream studio releases, all of them watchable early 80's horror films. I have no idea what got them banned as opposed to many similar films that did get released.
There is another handful of interesting films on the list like Shogun Assassin and The Burning. Most of the rest is unwatchable dross, but none of them should have been banned of course. Cannibal Holocaust is considered a classic by some, but I find its message hypocritical and its sadistic killing of real animals genuinely upsetting and the same goes for its sequel Cannibal Ferox. Last House on the Left, Driller Killer and I Spit on Your Grave are probably the most famous titles on there, but they are rather poor films IMO. I suppose they genuinely pushed buttons at the time and two of them are still famous because their directors went on to bigger things.
For anybody who is in doubt, these are the films that were on the Video Nasty list:
http://en.wikipedia.org/wiki/Video_nasties