Launcelot is Arthur's star knight – the best and the bravest in battle, a man admired wherever he goes. In short, he's a rock star. How do we know? Well,
(1) Launcelot almost always takes the prize at tournaments.
(2) He defeats knights that no one else seems to be able to match, like Sir Trystram or the evil Sir Tarquin.
(3) The narrator tells us so, right at the beginning of "A Noble Tale of Sir Launcelot du Lake": "in all turnementes, justys, and dedys of armys, both for lyff and deth, he passed all other knyghtes – and at no tyme was he ovircom but yf hit were by treson other inchauntement" (151.38-41).
For this reason, Launcelot is hero-worshipped by many, with young knights like Gareth and Trystram falling all over themselves just to hang out with their idol. If Camelot were a high school cafeteria in a movie, he'd be sitting with the popular jocks, front and center.
No surprise here, Launcelot is also very popular with the women-folk, many of whom come up with elaborate schemes to try to win his love. None of them work, of course, because Launcelot's heart already belongs to another – Arthur's wife, Queen Gwenyvere. Launcelot is so devoted to her that he refuses to sleep with another woman even to get out of a dungeon, and goes mad when he thinks Gwenyvere has dumped him.
Funnily enough, only at one point does Le Morte actually verify that Launcelot has a physical relationship with Gwenyvere – in the scene where Launcelot bloodies Gwenyvere's bed as both are held captive in Mellyagaunce's castle. But regardless of what they actually did or didn't do, it's clear that Launcelot loves Gwenyvere, and that's a big, big problem.
Unfortunately, the Grail Quest makes very clear that Launcelot's devotion to Gwenyvere is his failing as a Christian knight. There, Launcelot learns that he'll never be allowed to see the Grail because all of his knightly deeds were done not for God, but for Gwenyvere. Whoops. Although Launcelot repents and promises to do better in the future, it's too late. As a mysterious lady on a white horse tells Launcelot at the beginning of the Grail Quest, "ye shall not wene from hensforthe that ye be the best knyght of the world" (501.34-35). That title belongs to Launcelot's son, Galahad, who may not best his daddy in deeds of arms, but who achieves the Grail Quest because of his purity and piety, which Launcelot just can't match.
Despite his failure in the Grail Quest, however, Launcelot remains the knight Arthur loves best and, in return, Launcelot grants Arthur his total devotion. Even at the end, when Aggravayne and Mordred have exposed Launcelot and Gwenyvere's affair, Launcelot refuses to do battle with his king, even re-horsing him when Sir Bors gives him a fall and telling his vassals that "I woll allwayes fle that noble kynge that made me knyght" – "I will always decline to battle with that noble king that made me knight" (674.22-23). Just as he always was for Gwenyvere, then, Launcelot is unfailingly loyal to her husband, right until the end.
At the end of his life, perhaps inspired by Gwenyvere's example, Launcelot finally devotes himself completely to God. He buries the body of Gwenyvere next to Arthur, ceding to the king in death what he couldn't seem to let go of in life and what, finally, caused the undoing of the best knight in the world. It's a tragic, but fitting ending to a story filled with tons of drama. It's enough to give Romeo and Juliet a run for their money.