Essential: One of the supermods - GWX, LSH3, NYGM, WAC. They all correct the major flaws in the game, and they all change it into something workable and wonderful. There are threads on each of them - what they do, how they do it and why. Easy to look up.
Best: That's all a matter of opinion. All have their adherents. Beyond those four there are indeed thousands of smaller mods that are compatible with one or all of the major supermods. None of them are truly essential, but most of them are fun. Pick a supermod, ask the people who favor it why they do so, and look at the other mods to see what catches your fancy.
The author of
this thread was a GWX fan, but his list and the ones that follow will give you a little insight as to what's available. Unfortunately he took down his pictures, but the links are still there and others of us still have pictures up.
This thread will give you some idea of what others use.
Lastly, no matter what mods you use, you might want to try
this Utility. It's not a mod, but it has many useful functions that help control the game and does for your campaign what supermods do for the game experience.
I (and others) will be glad to answer specific questions, but to list all the available mods would take hours and some would still be missed. Read the SH3 downloads section.