Lovecraft is an author I have very mixed feelings about. He had doubtless a colossal imagination (and probably would have been an utter delight to speak with) but he was also often hampered by ham-handed prose, and his best stories are IMO where his imagination triumphs over his (lack of) writing skill..
So, aside from that... I think "The Colour out of Space" is my favorite lengthy Lovecraft story. It's just one of his most purely horrific works.