Best Order to watch the Star Wars Saga:
Adam Rifkin stashed this in Star Wars!
How can you ensure that a viewing keeps the Vader reveal a surprise, while introducing young Anakin before the end of Return of the Jedi?
Simple, watch them in this order: IV, V, I, II, III, VI.
George Lucas believes that Star Wars is the story of Anakin Skywalker, but it is not. The prequels, which establish his character, are so poor at being character-driven that, if the series is about Anakin, the entire series is a failure. Anakin is not a relatable character, Luke is.
This alternative order (which a commenter has pointed out is called Ernst Rister order) inserts the prequel trilogy into the middle, allowing the series to end on the sensible ending point (the destruction of the Empire) while still beginning with Luke’s journey.
Effectively, this order keeps the story Luke’s tale. Just when Luke is left with the burning question “how did my father become Darth Vader?” we take an extended flashback to explain exactly how. Once we understand how his father turned to the dark side, we go back to the main storyline and see how Luke is able to rescue him from it and salvage the good in him.
The prequel backstory comes at the perfect time, because Empire Strikes Back ends on a huge cliffhanger. Han is in carbonite, Vader is Luke’s father, and the Empire has hit the rebellion hard. Delaying the resolution of this cliffhanger makes it all the more satisfying when Return of the Jedi is watched.
Narratively, it’s just like a movie that starts with a big opening, then fades to “2 years earlier” for most of the movie, until it catches up with the present time and concludes.
Even better is "Machete Order" which completely eliminates Episode I. You heard me.
Here's an excellent description of why: