You make some good points regarding Dostoevsky, particularly how Poe was doing that sort of thing even earlier. I guess if you put the emphasis on style and form, I can certainly see why Dostoevsky would rank lower, but I'd still want him top 20 at the least.
And I didn't mean to assert that The Tale of Genji shouldn't be included (and thanks for clarifying its history with western literature a bit). I'm just worried because the word "novel" does not have as strict of a definition as, for example, "album" does. It's not as temporally or geographically confined. It's easier to determine the greatest album because you only have to look back about 60-70 years and almost exclusively in English speaking countries. I mean, what to do with these: http://en.wikipedia.org/wiki/Novel#Ante ... _the_world
And even Don Quixote was not a novel when it was published, as there was no tradition of the novel established. Nor did it do much to establish such a tradition. Don Quixote was a romance, a genre that stood in contrast to the novella of the day. Romances followed knights and nobility and their romantic, heroic journeys, while novellas followed the lives of ordinary people and were typically much shorter. It is this latter genre that ultimately evolved into what we now call the novel. Don Quixote is still immensely influential on the novel because, once the genre was established, authors went back to older works and Don Quixote is simply one of the greatest works of art, but I'm not sure it should even be on this list. And if it should, I'm not sure it's a lock for number one. But maybe I'm just being too pedantic.
On an unrelated note, I don't see any way that Moby-Dick could be ahead of The Adventures of Huckleberry Finn. They're pretty much unanimously considered the two greatest American novels, but one was forgotten and ignored for half of its existence. Huck Finn really opened stylistic doors that helped authors move away from the high diction that people seemed to think literature demanded. I'm not saying Moby-Dick wasn't influential, but it was influential on a much smaller portion of literature (e.g. the postmodern encyclopedic novel), whereas Huck Finn (or rather, Twain's work as a whole) really ushered in a whole new era of American fiction.