well , i recommend following books :

1.  Kattel Sir ko Chotpatak /Alikhit (Novel) - Dhruba Chandra Gautam.
 
2. Ular(Novella) - Nayan Raj Pandey.

3. Modi Aaeen (Novella).  - B P Koirala

4. Atmabritant (Autobiography)    - B. P. Koirala ( In fact, every work by B P Koirala is worth a read.) 
 
5.Belayat Tira Baralida (Travelogue) - TaNa Sharma

6.Shaliedra Sakar Ka Kabita (Poems) - Shailendra Shakar. 

7. Irfaan Ali (Stories)-   Narayan Dhakal.

8. Laxmi Nibandh Sangraha(Essays) - Laxmi Prasad Devkota.

9.Aamako Sapana(Poems) - Gopal Prasad Rimal.

10.Ghumne Mech Mathi Andho Manchhe(Poems) - Bhupi Sherchan.

11.Niyamit Akasmikta - Bal Krishna Sam.

12.Abstract Chintan Pyaj(Essays) - Sankar Lamichhane.

13.Prateyk Thau Pratyek Manchhe - Peter J Karthak . ( I am sorry I remembered this again and felt I could no way exclude this. This novel is translated in English too . Please read a commentary/review by CK Lal here :http://www.nepalitimes.com/issue/2005/05/27/Review/331 )

14. Mokshyant Fever Kathmandu(Stories): Kumar Nagarkoti . ( I would not have included this one if it were not by my fren. I have been greatly impressed by few of the stories but I don't understand all of them. But, again I didn't want the list end in 13 - the bad number.)

Well, these are the amongst what I liked in Nepali literature. There are great stories and poems written in Nepali literature. And compared to these, the modern day media established writers like Narayan Wagle , Samrat Upadhyaya ,etc. pale into insignificance. I pity them.