My favorite item is the Whip in Spirit Tracks (yes, it's in Skyward Sword too, but I like the Spirit Tracks Whip better!). It was a new and unique item in the franchise. It had limited combat ability, but it introduced some never-before-seen puzzles/puzzle elements, and it was fun to swing around!
I would say the Clawshot or the Dominion Rod.
The Clawshot was extremely useful, and was just awesome overall.
BUT I loved the Dominion Rod, mostly because it's unique and different from the other items that Link had. Plus, who doesn't love using statues to kill a giant spider?