It's a tie between HL2 and Crysis. They both succeed at intense environmental and story immersion.
Honorable mentions:
Skynet (anyone remember this one?)
Medal of Honor: AA (SavingPrivate Ryan: the FPS)
Unreal Tournament (and '04)
BF2
Lots more but I'm trying to keep the list small.
Could Tie Fighter qualify as a First Person Sim Shooter? Cause I love me some Tie Fighter

That's what we need to beat theh Ceph, a TIE Defender!