First, the good:
Counter Strike: Source

Oh, and the ability to alter the physics doesn't hurt, either.
Thanks the the Source engine used in HL2, CS:S did ragdoll right. It's generally convincing to watch a T or CT crumple after you fill him with lead. If you've ever played around with Garry's mod, you'd see just how impressive it is.
The bad:
America's Army

...Riiiiiight....
The ragdoll physics in AA are not pretty. Instead of characters just falling down normally, they tend to fall in the most awkward positions imaginable.
And the ugly:
Call of Duty 3

A rare occasion indeed
When it's working, the ragdoll in CoD 3 is acceptable. But therein lies the problem. It only seems to actually work when it wants to, and when it doesn't you're left with an ugly death animation, usually ending in one or more limbs hanging rigidly out over an edge.
Well, there you have it. The moral of the story? Every developer, use the Source engine. Problem solved.