I think Kakashi plays favourite but that doesn't make in a horrible teacher.

Kakashi turned down Naruto by himself just after the second part of the exam and I think at that point of the story Kakashi wanted to train by himself after what happened with Kabuto.
Later when Sasuke met him he doesn't ask but Kakashi can't refuse to keep him whereas Naruto was an obstacle to his own trainning.

there's a lot of moments where Kakashi showed he has a soft spot for Sasuke and his whimsical by example during the first arc, Kakashi compliment Sasuke for his quick reaction when he saved Naruto and protected Sakura against the twins ninjas and at the same time he apologized to Naruto by saying he didn't know that Naruto would not react and be paralyzed. Knowing a little bit Naruto, it's a really clumsy thing to say to a student who search acknowledgment all his life.

I can't even remember if Kakashi was here for Naruto's fight during the one on one fights, and he wasn't here for the third part of the exam.

It's not even because Sasuke is the best or because Naruto is the Kyuubi, Kakashi's own personal history and his tie with the uchiha family probably influence him in one way or another. it's human after all , you want to help people you feel closer.

Hm, I think Jiraiya told Kakashi that he would train Naruto *after* the chuunin exams had already taken place. Kakashi refused to train Naruto *before* the chuunin exams. (Please correct me if I'm wrong, I have a horrid memory.) Yes, he placed him in the charge of Ebisu, but it's still a bit irresponsible to leave one of your most powerful and in-need-of-training students (who does, after all, have the power to destroy the village and a real sore spot about being brushed off by people) for someone else to take care of. No one else in the village even likes Naruto; Ebisu certainly didn't; Kakashi should have known there would be problems.

I don't think Kakashi is a bad teacher. I just think he mishandles situations and ends up losing control over both of his most valuable - and dangerous - students.