There's really three options as far as I see it.
Grey Wolves 1.1a (GWX upcoming) - Graphically superior to other mods and vanilla. Completely changes the feel of the game. More realistic through the use of the NYGM damage model, changed weapon performance and includes a 24 hour fatigue model to help reduce the amount of shift changes. Far more encounters, convoys, harbor traffic and the like. Lots of historical radio messages. I love GW.
NYGM Tonnage War 2.01 (2.2 upcoming) - Strives to be extremely realistic, an extreme amount of work has been done to acurately reflect the damage, performance, detection and avoidance systems of subs and escorts and planes. Very much a more difficult and challenging mod. Less map data, stronger enemies, realisticly random upgrades enemy routes, random speed and course convoys, a ton of stuff for those wanting a simulation rather than game. Uses tonnage and time rather than renown for sub upgrades. Along with GW, it's used as the mod of choice for
Wolves At War reinactment campaign.
U-Boat War Ace 1.92 - This is a stand alone 'super mod' as well. Simiar to the other two mentioned this one adds in a TON of extra harbor things, but it's main claim to fame is a giant list of historical battles and engagements that are recreated and you can view/be involved in. I have it, but other than one quick patrol haven't played with it much. Graphically demanding but those who like it reallly realllly like it.
Personally I use a GW and NYGM install both, but seperate. You'll definately want a copy of SH3 Commander to help run and tweak things. SH3 Weather program is kind of neat as well. SH3Gen patrol info program is nice as well.
That's what I personally remember about the mods off the top of my head so hope it helps.