1. Kannawa-en Inn
The traditional gardens and the rare color-changing outdoor bath pretty much sealed this for me. I went last fall, but nothing topped it since.UPDATE (2011): I am sad to hear that this place closed. It was truly legendary and I can only hope they don't turn it into a parking lot or something made of concrete.
2. Suginoi Palace
It costs a lot, but it is really worth it. Great view, incredibly clean and the variety of the baths make it a top ranking onsen. The only drawback other than price would be the faint smell of chlorine in the baths.
3. Mugen no Sato
A rustic outdoor bath that came highly recommended. I enjoyed the scenery and the location next to the river. The only problem is that so did the moths.