I thought it was a great "descent into madness" performance taken on its own, but I really don't feel like he actually played The Joker so much as a crazed clown guy inspired by The Joker.
The talkshow scene is tense and disturbing as hell, and maybe one of the most shocking things we've seen The Joker do in a film, so I think it does leave an impression. But yeah, it's just not The Joker to me. I was surprised to see how many people said Phoenix had eclipsed Heath after the film came out. I think the R-rated violent content may have had something to do with that, or just good ol' recency bias.
Jack embodied a perfectly valid take on The Joker and doesn't get nearly enough credit these days. Yes, he was Jack as Joker, but it was perfect casting and added a level of prestige to the movie that set a precedent for the entire franchise. It's the darker and more twisted cousin of Caesar Romero's Joker, which was perfect for the time and the tone of the film.
Heath, we all know, just transcended to another level with that performance. It still doesn't make sense to me to this day that the hunky dude from A Knight's Tale is underneath there somewhere.