I've had versions of this list for years, and it's always been the same, pretty much. The rule of thumb is that there must always be either 4 or 6 books on it; in exceptional circumstances some other number might be allowed, although I'll avoid 5 as much as possible.
And I can't define what "best" means. These are certainly not the books I've re-read most often, or that have influenced me the most (no Doc Smith is on the list!), or necessarily even the ones I've enjoyed most. I think it's something like books I recognize as having high literary and science-fictional values and being strongly to my taste. So don't expect me to be impressed if you disagree with me.
The list is science fiction, not fantasy. Yes, I know the boundary is very fuzzy. But I'm not the biggest fan of fantasy (though I'm bothered by keeping The Lord of the Rings off this list).
I had to create this page since I referred to the concept of my five best SF books list in a booknote, and didn't want to bury the whole explanation there.
The links below, if they are links, go to my booknotes on the titles in question.
I just added that last one (5/19/2014), giving me the dreaded 5 for a while. I'm giving some consideration to something of Greg Egan's, too. Not David Weber, though, at least so far; he falls more into Smith's category, stuff I like a lot, sometimes even am influenced by, but lacks the literary quality to be really top SF. And what about Lois McMaster Bujold? Or...oh! Maybe John M. Ford's Growing Up Weightless?