As for Lou Reed solo albums, Berlin is considered a masterpiece. It's quite heavy and light on guitar, but it's a really beautiful song cycle (Boy meets girl, boy loses girl, etc.). As for his later work, New York and Magic And Loss are two other great albums. New York has the song Dirty Blvd. (which was a small hit when it came out in 1989) and a song where Bono gets mentioned! Magic And Loss is just my personal favourite song ever.
If you can still find it (don't know if it's still in print), try to get the 3CD box set Between Thought And Expression which is a compilation of all his work up to New York.
And as for live albums, they don't come much better than Rock'n'Roll Animal.
C ya!
Marty
P.S. Also try to get the song Street Hassle, an excellent 11-minute novel (with a cameo by Bruce Springsteen).