I think '07 is very underrated and deserves the nod over '05. Nadal was 56-8 heading into the summer with 6 titles. He won IW without dropping a set, beating Djokovic, then played arguably his best clay masters at that point, MC, where he also didn't lose a set and beat Federer on clay in straights for the first time. He won 3 of the first 5 masters, reached 4 of 5 finals, and lost to the eventual champion in the two masters he lost (and either won or lost to the eventual champ in 8 of the 9 masters events that year, all told). His form at RG was sublime, losing only one set all tournament, beating baby Delpo, a resurgent Hewitt, Moya, Djokovic and Fed. At worst his fourth best RG, and probably his third best considering form and competition.
Then at Wimbledon he beats Fish, Soderling, Youhzny, Berdych and Djokovic, succumbing to Fed in an epic 5 set match in the final.
Nadal had an awesome '07.