I remember being so excited for new episodes around like 02. The #1 Hat, Idiot box, Salty Spittoon, Hash Slinging Slahser, etc. To this day when I see them on I'm like "These are the newer ones" even though they're over 10 years old now.
Incredibly hard to say, there are so many good ones. Looking at the episode list per season, I'd have to flip a coin between the first 2 seasons. Season 3 had some gems for sure but the first couple seasons were pretty much without a bad episode. Season 3 had a few, IMO.
FWIW this coming from someone who was 18 years old in 2000 and has never watched it drunk or high (or even been high for that matter) or watched it ironically. Odd as it sounds to some, that show is freakin' funny and is plain good. I discovered it channel surfing w/my then-GF and we came across the Valentine's Day episode when it was current. We watched it trying to figure out what Patrick was supposed to be, and totally fell for the show. Once in a while I'll still flip it on when I see old episodes being aired.
Looking at Season 4...wow. As a kid/teenager, I learned to differentiate between the "better" episodes and the newer, poorer ones, but I never realized how suddenly the drop off came.
I go with season 3. The camping episode, the training video, Plankton's Army, the painting episode and my personal favorite, the episode where Spongebob breaks his bottom (that they never showed on TV ).
Although Season 2, with Pre-Hibernation Week (special guest: Panthera), is up there.