Shards of Honor is certainly the best book to start the Vorkosigan Saga with. Its demerits become a bit more obvious on rereading - Cordelia basically has two moments of Miles-like audacity, when she disarms the rebels on Aral's ship before escaping, and then when she again escapes from her own people; and she depends a bit on the tremendous good chance of bumping into Aral at the crucial moment of her confrontation with Vorrutyer. Also - and this is an area where Bujold distinctly improved in later books - the politics of Barrayar and more especially Beta are rather two-dimensional. But it is tremendously well told, and the two personalities of Cordelia and Aral sustain the narrative to the point where you finish the book anxious to know what happens next.
Barrayar takes up the story, concentrating much more on the unstable politics of a society in transition from experimentation with different forms of autocracy and conformity to, well, something else. Bujold gets a lot of humour from the clashing cultures of Beta and Barrayar, but also the political and personal dilemmas here are more profound, and Cordelia's act of bravery in challenging Vordarian (including Bothari's role in her triumph) seems much more consistent and logical given what we have already seen. It is a storming good book, though I wonder how much it could appeal to readers who had not already encountered both Cordelia and indeed Miles, who spends most of this book waiting to be born but whose later career was already well established by this stage. Still, there is no rule saying that Hugo voters must assess a work on how well it stands on its own rather than how well it develops the series, and Barrayar is definitely one of the high points of the Vorkosigan Saga.
The other books up for the Best Novel Hugo in 1992 were Bone Dance by Emma Bull, Xenocide by Orson Scott Card, All the Weyrs of Pern by Anne McCaffrey, Stations of the Tide by Michael Swanwick and The Summer Queen by Joan D. Vinge. The only one of these I have read is the Swanwick, which won that year's Nebula, though I wasn't wowed. I seem to remember having been definitely warned off both the Card and the McCaffrey. Is The Summer Queen a sequel to The Snow Queen?