Of what hasn't already been mentioned (Vintage Season is without peer, as is just about anything by Kuttner and/or Moore):
Jane Austen's Lady Susan is a fine short epistolary novel.
James Clavell's King Rat is probably too long to really qualify, but it's a brilliant depiction of life in a WWII Japanese POW camp.
Bel Kaufman's Up the Down Staircase looks longer than it reads. It's another epistolary (more or less) novel of a young teacher's first semester out of college, teaching in a NYC public school.
Is a short novel the same as a novella? I love Colette's Gigi (never seen the film.)
Favorite short novels would be:
Bonjour Tristesse,
Francoise Sagan
The Haunting of Hill House
and
We Have Always Lived in the Castle,
Shirley Jackson
Of the top of my head,
Shopgirl
by Steve Martin
and
Who Will Run the Frog Hospital?
by Lorrie Moore come to mind.
Maybe Lansdale's Mad Dog Summer.
From looking at lists of novellas, I think the format doesn't work for me very well -- there are certainly some I like, but I prize things I can reread, and with novella length fiction I'm probably going to remember most of the details, unlike with a novel, but it'll still take a while to get through, unlike a short story. So even if I'm like, "Oh yes, that was good," I'm rarely in the mood for them.
I liked The Body Artist and it worked well in the short format.
So what do you like in the short form?
Tea With the Black Dragon
-- R. A. MacAvoy
Tea With the Black Dragon
Lovely book, though I wouldn't call it a novella.
Mrs. Caliban
by Rachel Ingalls
Uncommon Reader
by Alan Bennett
I just realized I like shorter books to be a little more thoughtful
and i really hope none of you have missed the Uncommon reader