Effectiveness goes beyond damage
I really like DMs that are more than stronger versions of regular moves. For example, most grapplers' DMs are used exactly the same way as their regular throws (except that they do more damage, obviously.) However, Iori's Yaotome (the first DM mentioned in this thread) actually increases his flexibility as it is more reliable and versatile than his flaming uppercut.
Aside from Iori's Yaotome, here are a few DMs that are more than glorified versions of a character's normal repetoire of moves:
Ryo's Heavenly Judgement Haoh Ken LDM - It dizzies the opponent; now that's unique and truly worthy of being a LDM.
Leona's Capital V Slasher LDM - A great anti-air (since I find her Moon Slasher to be easier to hit now) that can be used against people jumping in from Tag Attacks; this is a great move considering the Tag system of 2003.
King's Illusion Dance DM - This is the move where King back-flips out of harm's way, then immediately launches herself in a barrage of attacks; it's a great defensive manuever.
K's Heat Drive DM - Aside from being a great way to finish a 2nd Shell combo (I find that I have to do this near the corner now,) it comes out so fast and K' keeps his head so low that it becomes a multi-purpose move.
And my opinion of the most effective DM...
Vice's Jumping Over to the Opponent When He Least Expects It then Slamming Him on the Floor a Whole Lot of Times DM (QCF x 2 + A/C) - This is the one of the very few moves that's more than a more damaging version of the grappler's regular throw. Just when your opponent retreats into a corner, trying to put you into a fireball trap of some sort, you spring this on him for being so tacky. It comes out fast, Vice moves in an arc, it's a move that really sets her apart from Clark or Shermie.
All these moves have something that is a little beyond what you'd expect from the characters; they're DMs, you can't use them all the time. I cite them because in higher tier games, where both players have no problems finding an opening via poking and completing long combos, it's these nuances that'll catch one of them off-guard and determine the match; I'd call them "clinchers" if I was a fancy talker, ahyuk.
, and just about anything that king does man that dirty HO has got some serious firepower esp in 2k3.