Time to make a few million enemies....
It depends on what you mean better; If you meant the Dragonlance novels and the Forgotten Realms books then...NO! As much as TSR and the WotC have done for the hobby of the game, their novels just plain blow chunks of green crap!
I stopped reading a lot of fantasy novels becuase they are nothing more than over-glorfied gamer fiction. Of course this is a generalization and there are a few books that I have read that were advertised as gamer fiction so I knew what I was expecting before I picked it up. I have a friend that has tried to get me to read the DL novels (I have a think against Weis/Hickman ever since The Darksword Trilogy - great books, STUPID ending.) and I finally relented, yep, same old, same old. A novel that is advertised as a novel should be just that, a novel, not a long labourious gamer fiction reading. I can get that on websites like ENworld (not the laborious part, the gamer fiction part.) Heck I'm even writing a novilation based on my current campaign, but I have no allusions of fame and fortune just because its fantasy; my buddy thinks its high literature, I think its something to pass the time on Tuesday.
I know this is a generalization, but for the most part I would say that fantasy has suffered. There is a lot of it now (which there wasn't in the day), but quantity doesn't equal quality. LotR is a great trilogy because of the significance of it, if it were written today it would be panned as long, unwieldy and too slow, but would it be any less great? A modern publisher would say yes. As much as I hate Harry Potter, I must admit that they are well written and thought out extrememly well. The Wheel of Time was great until about book seven, now I just want him to finish before he dies; I'm committed so he had better be too! Brooks, Eddings, McCafferrey, and Lackey were awesome until they forgot how to stop.
Unfortunately this kind of ties into my rant on anime, whatever is popular must be mass produced and watered down immediately if not sooner. Fantasy was good once, it was innovative, humorous, horrifiying and stretched the limits of our imaginiations; no its just a rehash of whatever was released last week. I appreciate a few authors like Robert Lynn Asprin that figured out what was fresh and when to quit (MYTH INC) and a new way to keep the same old fresh (Thieves' World), if this is what fantasy can aspire to, then yes, it is moving forward, otherwise, we're stuck in the mud and have four flat tires to boot.