Well, the most wasted Comic Book Villain has to be Doctor Doom. The FF movies work as fun family films to some extent, but there's no denying that they completely dropped the ball with Doom. Turning a classic, larger-than-life super-villain into just another smarmy corporate type is like turning Goldfinger into a crooked accountant!
Two-Face in Batman Forever was pretty much thrown away as well.
I'll defend Gene Hackman's Luthor, though. Granted, he's different from the comic book version and probably too campy for modern tastes, but it's a funny and engaging performance in its own right. You can tell Hackman is having a ball and he's got plenty of good lines. He also plays off nicely against Christopher Reeve's sincerity and earnestness. Superman is straightforward and soft-spoken; Hackman's Luthor is a cynical smark-aleck. It's a nice contrast.
Hard to pick a best villain, but Magneto and the last two Jokers have to be up there.