Actually not my favorite island if I'm honest. Have been to (and dived at) Lily Beach, Kuredu, Meeru, Bandos and Paradise. I prefer the islands further away from Male - you can see Male itself (and watch the aircraft take off and land) from Paradise which IMHO ruins the tropical island feel you are looking for in the Maldives.However it is handy for transfers...................
The best house reef of the islands I've visited is easily Bandos (who also have an excellent set up dive operation -wise, easy nitrox fills etc) best overall diving a toss up between Meeru (best operator), Lily Beach (more relaxed, some fab thila dives for photography, permitting lots of customer input to choice of sites and a fair housereef if the current isn't running so fast you fly it in twelve minutes!) and Kuredu (who offer speedboat trips to further sites and also overnight Safaris). We were at Paradise prior the tsunami (our room was one of those actually washed away a few months later!) and the place tended to have the feel of a conference centre with a beach, rooms unspectacular (assumedly now rectified), diving OK but were not great fans of the company running the diving at the time (Delphis) as they were decidedly un customer-focussed!!! The food was however possibly the best of everywhere we visited as they did some spectacular theme nights on the beach. They also have a fair few day visitors (for conferences and to join cruise/safari boats) but that has the upside of the island being quieter in the evening. Nice pool too.
If I was to go back to any of them it would probably be Lily Beach for it's intimacy - but then they always say you fall most in love with the first Island you visit............................................