He's a good player, has written some of my favourite guitar riffs but has a tendancy to rely on a very similar sound which has resulted in the "One Riff Morello" jokes.
He's obviously both technically talented and creative though, I think he just needs some kind of really interesting musical project to bring it out in him, Audioslave were good but I think brought his playing back somewhat since they were more of a generic hard rock band than Rage.
A new Rage album would be great. He could do with switching out a few more of his effects maybe. I'm not sure how good switching his flanger for a phaser in, I used to always considered phasers more musical but nowadays they seem a bit weaker and more gimmicky, a Flanger can be used both for the sweep effects and like a Chorus.