Having played all five Quest for Glory games, Quest for Glory 3 is easily my favourite: the beautiful setting and wonderful locations (the city of Tarna, the temple, the Simbani village, the Heart of the World, etc.), the characters, certain of the events (telling Salim about Julanar, the various interactions in the Heart of the World, the final confrontation, the temple judgement, etc.) all combine to place it for me above the other games in the series.
In all fairness, there's likely at least a little bias on my part: it is, I believe, the first Quest for Glory game that I ever played, and part of certain treasured memories. Nevertheless, having played it more recently, I don't think that said bias fully accounts for my preference for Wages of War.
I'll admit that Wages of War isn't perfect; there are things that I think could be improved: the ritual of creating a wizard's staff could be made more involved and more interactive, Erana's backstory could have been touched on (beyond the minor implication of her having been there), the village could have been bigger, etc.
Second to it I'd likely place Quest for Glory 4, but while that has a number of excellent elements -- the wonderful conclusion of Erana's story, at least until the fifth game; the Rusalka (especially when playing as a paladin); Toby and the little girl, etc. -- it never quite manages to charm me as well as does the third game. It doesn't help that I enjoy the combat systems from the first three games -- that in Wages of War in particular, and that in the AGD remake of Trial by Fire more yet -- but am no great fan of the system used in four.
As to Quest for Glory 5, I honestly rather enjoyed it. Again, it's not perfect, but I love the way that it brings back old characters and ties off old threads. I love finally meeting the Famous Adventurer (and the music that they play in his house is just wonderful: wistful, old, reminiscent), and finding out what became of Elsa, and seeing Rakeesh again, and so on. The graphics looked fine to me: not as good as those in three and four, but good nevertheless. My only real dislike is the combat, which I feel became somewhat generic.
On a side note, I too didn't know that one could calm Issur in order to get the bellows in Quest for Glory 2! Levitation hadn't occurred to me, I don't think, but surprises me less. ^_^