In Fallout 2, you start out with only a Spear, making Melee Weapons a highly valuable skill from the beginning.
In choosing a melee weapon, don't focus too heavily on which weapon has the highest damage. A fast weapon like a Combat Knife or Ripper can make more attacks in a given length of time than a heavy Sledgehammer, potentially generating more damage in a shorter amount of time. Refer to the DPS stat on the Fallout 3 weapons page. More attacks also means more chances to stagger an opponent so they can't attack back as quickly, reducing the damage you take. Shishkebab is generally considered the best melee weapon available as it has the highest base DPS, which is only improved further when combined with Pyromaniac. However, Jack can, depending on whether or not you have a high base critical chance and/or the Ninja/Better Criticals/Finesse perks deal an astounding amount of damage far superior to that of the Shishkebab in a damage-per-second sense. Jack is especially effective when performing a sneak attack critical hit, since these are known to instantly splatter most enemies.