Best new franchise this generation? Man, that's a tough question.
I'd nominate Pikmin, but Pikmin 1 is just a super flawed game imho. Pikmin 2 is so many hundreds of times better than the first that it's just incredible. If I had to choose "most improved new franchise", I'd give it to Pikmin. Pikmin 2 is a fucking timeless classic, imho.
If Katamari Damacy 2 ends up great, I might give it to this... just because it completely reinvigorated the idea of simplicity over complexity without the normal strings that are attached to such a claim. I don't know exactly if we'd call it a "franchise" yet, but I'll wait and see to KD2 comes out...
Halo is another one I'd have to add into the most improved category. I really despised Halo 1. But Halo 2... I like it a lot. Obviously this game had a significant impact on this generation, so in terms of importance I might give it to the Halo games. But I don't think that overall they're the #1 new franchise in terms of quality.
I wish Grand Theft Auto was a new franchise this generation, because the 3D games really brought a lot of awesome concepts to the genre and absolutely redefined the notion of free form gameplay. Unfortunately, it's not a new franchise... no matter how different the 3D games are from the 2D games. Sorry, San Andreas.
Kingdom Hearts is a game I'd like to nominate, because I just see so much incredible potential in that series. But I don't know if I could give it to KH in good faith, just because the first had some major problems (gummi blocks, some camera issues, etc...). But maybe, like Pikmin 2, Kingdom Hearts 2 will improve on the first on every way.
Wario Ware is definitely another one. It is, by far, the most brilliant, most original title this generation... and it defines the perfect handheld gaming experience. I'm so tempted to give it to this one, but I don't know if we'd include GBA games in the 128 bit generation...
There's a lot...but...eh...I'll choose later.