Challenging? It's more like, "if you spend every moment of your life playing games and have the reaction time of a rabbit on some sort of mad crack, buy this game, it's a challenge". If you are a casual gamer go ahead buy the game but don't expect to get past the first level.
It was on my buy list once and then I rented it first (phew) and it was just too difficult and not entertaining.
However, my recomendations would be Forza (obviously) , Midnight Club 3 and DOOM 3.
Not a half obvious poll result given this is a car-racing biased site. Still, Forza is probably the best game on the list. Why can't you decide what you want between those WILDLY different genres? KOTOR2 compared to Forza?
Here's "gamerankings.com" average review marks (they average the most respected internet and magazine review scores to come up with how 'good' each game is...). Hope this is useful. Its most telling, and most unbiased gaugue of what games are really like...
Forza Motorsport 94.7%
Jade Empire 90.1%
Unreal Championship 2: The Liandri Conflict 87.4%
Star Wars Knights of the Old Republic II: The Sith Lords 85.5%
Mechassault 2 81.2%
Star Wars: Republic Commando 78.8%
Pariah 73.3%
You can pretty much cross off Pariah and Republic Commando as being complete junk. Personally, the only games worth the $$$ on Xbox are Halo and Halo2.
Obviously, if game quality regardless of genre is all that you care about, Forza is the obvious choice if you must buy a game on your list.