It may be a great story, but lack good characterization or dialog, overcoming those weaknesses through some other factors of the writing and storytelling. Hackneyed dialog, two-dimensional characters, but an intriguing setting and plot, for instance. A lot of pulpy novels are great, fun stories, but few are great pieces of writing as well.

Storytelling uses any avenue possible to express the story.

Shamans dance around a fire, play-actors get on stage, Film directors use CGI , actors, puppets, sets, and so on.

A writer writes. A good writer uses all of the tricks available to them that their language provides and is capable of doing so in a consistent manner to create their own written voice.

'To Kill a Mockingbird' was both well-written and a good story; the social impact it created reflects that.

I've read plenty of works that are either exclusively well-written, or exclusively a good story. It's not rare.

I think such people are talking about different things. One is more coarse-grain, talking about the story, pacing and themes. The other is more fine-grain, talking about the individual word choices and language play.

Here's a hint: if it's science fiction or fantasy, it's probably not considered 'great literature'.

Having everyone die in the end is bonus points for 'great writing'.

You can have compelling characters and plot points but still do a shit job of writing them down. GRRM fits this description perfectly imo.

The concepts are completely different. Here are several examples:

- Imagine yourself writing down the story of The Shawshank Redemption (hey, this approach worked for Terry Brooks!). How much do you think people would like it? More or less than the version Stephen King wrote?

- Imagine yourself writing the same story -- in Mongolian. It's the same story, written down.

- Tolkien's The Silmarillion has several excellent stories in it, which people will be happy to hear you tell them about after you go through the laborious effort of reading it. It's not a coincidence that the material of The Silmarillion wasn't written for publication.

- http://www.amazon.com/gp/product/B003X9775Q is an example of a fantasy novel with a fairly vanilla plot and some of the worst writing I've ever experienced.

- Pushing Daisies http://www.amazon.com/Pushing-Daisies-Season-Lee-Pace/dp/B00... is a comedic soap opera with superb writing and no particular plot.

- Imagine two people giving a lecture on the same topic. One of them is entertaining, one isn't. The first one had better writing for the same content.

- Imagine yourself playing Beethoven's fifth symphony as a one-man band. The music is widely acknowledged to be a great work. It turns out that the delivery matters. In the analogy, the music is the story, and the manner in which you actually produce it is the writing.

The canonical examples are J.R.R. Tolkien (Lord of the Rings) and C.S. Lewis (Chronicles of Narnia).

See Fantasy Classics at Goodreads: http://www.goodreads.com/list/show/318.Fantasy_Classics

Check out Guy Gavriel Kay. He's go a bit of a poet's background and writes utterly heart wrenching prose.

Can start most anywhere with him, but I'd recommend Tigana, Lions of al'Rassan, or Under Heaven as great starting points.

Gene Wolfe (Book of the New Sun) is great and a common recommendation along these lines.

Ishiguro's The Buried Giant from last year asks to be described as Literary Fiction with a fantasy setting.

But chasing down "If you liked Gene Wolfe you might like.." recommendations online would probably be fruitful.

I second the Gene Wolf recommendation.

Huge fan of China Mieville, but that's closer to "new weird" than "fantasy". Mieville's books are complex and gripping.

Yeah, this is a common problem in genre fiction unfortunately. The best one I've read is "The Magicians" series by Lev Grossman. The writing is clean, concise, everything is shown and nothing told. The series is a great deconstruction of a lot of classic YA fantasy tropes and has a solid magic system. Can't recommend this series highly enough, both my literary and scifi/fantasy fan friends have all really enjoyed it.

I'd also recommend Ishiguro's The Buried Giant, very close to literary fiction.

It steps a little outside of the bounds of what we think of as "fantasy", but the magical realism genre has a lot of amazing pieces, and the genre is based around fantastical elements. My favorite example of this is "One Hundred Years of Solitude" by Gabriel García Márquez. "Invisible Cities" by Italo Calvino is another good one.

Check out Robert E. Howard's Conan short stories. These are very well written and are in public domain.

It's historical (medieval) fiction, not fantasy, but Hild (http://www.amazon.com/Hild-Novel-Nicola-Griffith/dp/12500560...) is one of the best written books I've read.

edit: Jonathan Strange and Mr. Norell is up there http://www.amazon.com/Jonathan-Strange-Mr-Norrell-Novel/dp/0...

I find J G Keely's judgement aligned to my own: http://starsbeetlesandfools.blogspot.com/2012/06/suggested-r...

Pratchett was a genius when it came to knowing just the right phrase to conjure up an image, although reading all the Discworld novels in one go as I am at the moment reveals he's not quite so good at the storytelling side, often dragging on a few chapters too long.