Richard Thompson recommendations

Yes, "watching the dark" would be excellent, a wonderful 3cd set. If that hooks you, then you've got much to look forward to, all the solo albums, duos with linda, and the great early fairport convention stuff, and maybe even all the albums he's played lead on.
I like early Bruce Cockburn, but can no longer get on with him. He's such an ass of a person, that I can't get past that. A friend in the business told me years ago there are many greats that you wouldn't want to hang with, and he's one of them.
You might also try Martin Simpson, especially his latest, "prodigal son".

"Small Town Romance" is a solo live recording from the early 1980s. Sonics are good, but not great.

A couple more thoughts:

For sound quality, you may want to look for the Mitchell Froom productions.
These aren't necessarily "audiophile" recordings, but they are
generally good recordings of vocal/guitar surrounded by lots of stuff that
"enhances" the main ingredients. Unfortunately, this was a
relatively brief period (see "Action Packed", a Capitol Records
greatest hits collection) where RT made very good music, but it misses much
of the variety that makes his catalog so wonderful.

Also, RT is, as much as almost anyone I can think of, all about live
performance. His website offers many live cds, any of which will be
worthwhile. My personal favorite is "Two Letter Words" and I'd
highly recommend it.

Finally, listen carefully to some of the lyrics on those early records. Songs like
"Dimming of The Day" and "Walking on A Wire";("Where's the justice, where's
the sense, when all the pain's on my side of the fence?") . Then check out
the more recent stuff like "Guns Are The Tongues" , "I Feel So Good" ,
"Waltzing's For Dreamers" , etc. You really get a sense of just how broad RT's
lyrical ability is.

Marty

The greatest hits CD with his wife is also good. Fans should check out the CD-DVD Thousand Years of Music. Good sound and see him in concert and in casual interviews. Get Rumor and Sigh first.

I'm rather partial to the CD "Richard Thompson, Live from Austin." There's lots of his best songs and some amazing guitar playing, both electric and acoustic. Even better is the DVD version, so you also see his hands in action.