I have to say my favorite supporting character is Kramer's attorney, Jackie. It would be Babu if they would bring him back. I don't care for the pushy comedian friend(?) of Jerry's, the guy that's huge. Susan seemed to not click with the show.
Hands down, it's gotta be Mr. Peterman. He goes so over the top, you can't help but love the guy. For instance, the episode where Elaine was being called "Suzie", and to get out of it, she faked Suzie's death. Well, at the funeral, Mr. Peterman wants to speak, and he tells of the night they succummed to passion, and he says it in his great Mr. Peterman style. Remember, Suzie never existed. He just made it up on the spot. Any episode with him in it always leaves me laughing.
How could you not love Kramer's quick-tempered 'small' friend, Mickey Abbott? He works so well with Kramer it's frightening. Every episode he's in is great, the best one being, The Communist. Mickey being an elf was hillarious!