I would agree that Nicholson is not in the same ballpark as Ledger - each Joker is a different character completely, but the more psychotic, manipulative genius is a far, far, far more complex role than a disfigured former mobster with an art obsession.
I know this is a bit off-topic, and I'll probably get flamed for this, but I really wasn't too impressed with Ledger's performance. The only time Ledger really nailed the Joker persona (no pun intended) was the whole pencil trick. Whereas Nicholson embraced and fully developed the sick twisted nature of the Joker and gave us a worthy, funny, yet sick performance that tickled that dark humor part of our funny bones. He did this throughout the entire film. While Ledger nailed the "sick and twisted" part with perfection, we lost the "dark humor" aspect after that initial scene, of the funny loon that IS the Joker.
In Batman: The Killing Joke, the Joker, after a battle with Batman where Bats beats the living bejesus out of him, he still has the audacity to tell a joke that sums up the total of his character and explains why we love him so much:
See, there were these two guys in a lunatic asylum... and one night... one night they decide they don’t like living in an asylum any more. They decide they’re going to escape! So like they get up on to the roof, and there, just across the narrow gap, they see the rooftops of the town, stretching away in moon light... stretching away to freedom.
Now the first guy he jumps right across with no problem. But his friend, his friend daren't make the leap. Y'see he's afraid of falling... So then the first guy has an idea. He says "Hey! I have my flash light with me. I will shine it across the gap between the buildings. You can walk across the beam and join me."
But the second guy just shakes his head. He says... he says "What do you think I am, crazy? You would turn it off when I was half way across."
That very joke, and the situation in which he decides to tell it, defines the Joker's persona. He's not just the homicidal maniac Ledger nailed. I appreciate different takes and interpretations on characters and understand what Ledger tried to do. But somewhere in the process, he lost the very definition of the name...Joker.
