I made a post on another forum asking the same thing, Rat, and got a lot of suggestions (I was just asking for FPS on the Xbox, though).
Of the games that were suggested to me, by far the best was Timesplitters 2. Great co-op play. Some games let you play split-screen co-op, but don't take advantage of the fact that there are two of you playing. It's just like the single version of the game. But Timesplitters 2 sneaks in some cool additions just for two player. For instance, in one level there is a mounted remote control machine gun. The control and camera for the machine gun are in another room some distance away. Playing by yourself, your use of the remote controled gun is very limited. But in two player, one guy can stay behind in the control room while the other guy goes ahead to the room with the machine gun. The second guy is swarmed by zombies, and it's easy to get killed by them. But the first guy back in the control room can take them all out real easy with the machine gun before they can even get to the second player. That's the kind of two player gameplay I really dig.
Another good one is Hunter. Top down view and players share the same screen, so no loss of detail or visuals when more than one person plays, which is nice.
The splitscreen co-op FPS I'm REALLY looking forward to, though, is Men of Valor: Vietnam. Dumb ass title but it looks like it's going to be an awesome co-op FPS with 720p, among other things. AND you can save two player games in the middle of a level, something NO other game offers. (I got really frustrated with Halo because you could never save in the co-op game. Kind of ruined it for me.)
Last but not least - the last Lord of the Rings game, can't remember what it's called, is supposed to have awesome two player co-op. I haven't actually played it though.