I wouldn't have grouped The Colour out of Space with the Dream Cycle myself, I'd say it's more of a standalone story. I do love that story though, there's something about it I found very creepy. I do agree that the dream stories are generally better than his others. I particularly liked The Dream Quest of Unknown Kadath.Owyn_Merrilin said:The Dream Cycle is less known, but in my opinion, better. It includes things like The Dream Quest of Unknown Kadath, The Cats of Ulthar, and The Colour out of Space. Instead of giant monsters, it deals with where we go when we dream.
To OP: You should read At the Mountains of Madness and The Shadow Over Innsmouth, they're probably Lovecraft's best-known tales, and they're the ones that have been the inspiration for a lot of other Lovecraft-themed works. I'd also recommend The Dunwich Horror, that's one of my favourites.