The best part of Pendragon is the Winter Phase. It's a simple enough thing - a series of checks that determine your character's education, aging, and economic circumstances, but that it exists at all is a powerful statement of the game's intent. The game has a very definite and unusual approach to the passage of time. Your knightly adventures are framed in a yearly cycle, which itself is put in the context of a generational cycle. Death, whether on the battlefield or in the sickbed, is inevitable, and yet the story goes on. Your character will adventure, yes, but he will also live. Fighting monsters, rescuing maidens, and getting into pointless and petty personality disputes with heavily armed men are your character's job, but they are not the sum total of his life.
So that's pretty neat.
Certainly, the dynastic progression is the main reason to play Pendragon, over, say, Dungeons and Dragons. A case could be made for the unforgiving wound system or the prominent role Glory plays in your characters' development, but even those things are incorporated into the cycle (a lingering wound may be the reason a character stays home from the yearly adventure, whereas gaining glory can improve your marital and economic prospects). The actual system itself is only so-so.
Its big flaw is that it's overly enamored with providing fiddly modifiers to your various actions. It's not as bad as some systems I could name, but especially in combat, the tendency is there. On the other hand, those modifiers usually amount to a 5-10 point swing on a d20 roll, so they're easy enough to just eyeball. I'd say that it works, even if I'm not especially inspired by it.
Overall, I'm glad to have gotten this middle part out of the way so I can finally focus on the meaty fantasy stuff in the final third of the book. Upcoming is magic and creatures and adventures! Huzzah!