While everyone has a favorite episode, and popularity can change, the answer is very subjective.
I'm going to say that "Guitar Queer-o" is the most popular episode. When it aired, it drew in 4 million total viewers and was the most watched telecast of the year on Comedy Central, as well as the most watched program in all of television for Wednesday night among men 18-34 and the most watched program on cable among persons 18-49. The episode was the highest rating since "Cartman's Mom is Still a Dirty Slut", beating the previous record-holder "Imaginationland, Episode III", the episode that aired one week before "Guitar Queer-o".
The record has not been broken since. "Sexual Healing" came closest, with 3.74 million viewers.