Xenogears is excellent, and one of the best PS1 RPGs, hands-down.
I can't agree it's better than the early Final Fantasies or Chrono Trigger. It's just a bit too convoluted, a little too "Japanese" (read: Anime influence that is often hard to take seriously), and sadly, and this really isn't the fault of the game, it was rushed at the end to make way for FF7, so much of the final disk is compressed into overlong text windows.
Anyway, as far as recommendations for other, great 16-bit RPGs:
The (unofficial) 'Gaia' Trilogy
-Soul Blazer
-Illusion of Gaia**
-Terranigma**
3 excellent, and seriously underrated, action-ish RPGs from Enix. Illusion of Gaia and Terranigma are two of the best and most underrated RPGs of the era, perhaps ever. Terranigma, sadly, was never released in the US, but can be imported on eBay from PAL territories. Anyway, it is simply one of the BEST RPGs of all-time, as is IoG, and neither should be missed.
Also look at the Lufia games.
Lufia and Lufia II. Ans funnily enough, play Lufia II FIRST. It's a better game overall, and actually, Lufia 2 is a prequel to Lufia.
Oh, and finally, while it's anything but a JRPG, it still has one of the best stories and gameplay on the system, Shadowrun should not be missed!