As hard as it is to choose with such a GREAT show, I think my favorite episode has to be the one that begins with Jerry and Elaine on the sofa watching TV and flicking through the stations until they come to the one with "the naked people". The main result of the episode is that they become a couple again, despite the "rules" they agree upon beforehand to just stay friends while having regular sex.
My favorite scene in the show is the one with Jerry and George in the cafe the next day, as Jerry tells George about the whole thing. Memorable lines: "What planet are you LIVING on?!?" --- "Sleeping over---optional!" "No....See, you got greedy."