Watchmen is ultimately one of the keys to the rise of the Graphic Novel in America. Interestingly enough, both Alan Moore, the writer of Watchmen and several others, and Neil Gaiman, the author of the Sandman (the first volume of which I read last weekend), are both British guys who have done much to gain acceptance of Graphic Novels in America. In America (unlike several other parts of the world, such as Japan) comic books and animated television/movies are oft considered "child" forms of entertainment. Graphic Novels are the more adult form of comics: often darker, edgier, more violent, more emotional, more thought-provoking. The art of the graphic novel in American culture rose in the 90s and now is having a heavy influence on Hollywood. You've probably seen a live action movie based on a graphic novel (From Hell or the less than extraordinary League of Extraordinary Gentlemen), and if you haven't, you will shortly (Sin City).
Watchmen itself is the tale of a a group of superheroes (the Crimebusters, nee Minutemen)... an unravelling of their back stories (the characters are new for the novel, although derived from older, now out of vogue, characters), an examination of their worth to society, an examination of their morality and mortality. I've long been of the belief that a good superhero comic is an exploration of morality, and Watchmen delivers that well. That belief shows in my preference often of Marvel's comics (Spiderman, X-Men) to DC's (Superman, Justice League), and perhaps another facet of why City of Heroes just didn't keep my attention. That isn't to say that Marvel doesn't have its poorer properties or DC its worthier properties. In fact, it has been DC that's lead the pack towards more maturity lately. (Largely as a reaction to the popularity of graphic novels, as DC publishes many of the major ones, including Watchmen and the Sandman.)