Video game books have been exponentially increasing in quality, thank goodness!
The Gears of War books, written by Karen Traviss, are fantastic. Not only do they bridge the gaps between the games, they're also flat out some of the best books I've read in recent years. You'd think that there would be no room for novels in a series so fueled by testosterone and lack of real story, but you'd be wrong. Traviss also wrote the script for the third game, and her original character from the books (Bernie) is set to appear in the game.
Dead Space: Extraction is written by B.K. Everson, an up-and-coming horror writer. I'd recommend the book to any who have played the games, but newcomers would probably be lost and a little off-put by it. It definitely embraces what made Dead Space so great, though. It's a spooky read, with some great insight into mysteries proposed by the games. I hope there's more down the pipeline!
I have all the Halo books, and I hope to get them started next month. I was beyond excited when I found out that Greg Bear was writing a trilogy (the first one, Halo: Cryptum just came out). Bear is like... a sci-fi legend! Halo really seems to be on top of its game, in terms of telling its story through books, comics and anime. I really hope the books impress!