The Aids crisis has slashed the life expectancy in some parts of Africa to less than 33 years, according to the UN's Human Development Report 2004.
"Twenty countries have suffered severe reversals in human development in the last 10 years because of HIV/Aids," lead author Sakiko Fukada-Parr said.
The report ranks over 170 countries by quality of life, examining factors such as life expectancy and education.
Norway topped the list for the fourth year, Sierra Leone was at the bottom.
Norway's success as the best place to live was followed by Scandinavian neighbour Sweden in second place. Australia, Canada and the Netherlands were ranked third, fourth and fifth.
TOP RANKING COUNTRIES
1 - Norway
2 - Sweden
3 - Australia
4 - Canada
5 - Netherlands
6 - Belgium
7 - Iceland
8 - US
9 - Japan
10 - Ireland
As usual, industrialised nations figured heavily in the top 20, with the US coming in at eighth place, and the UK at 12.
At the other end of the spectrum Sierra Leone, which is recovering from a decade of civil war, was at the bottom of the index for the seventh year.
Placed just above it were Niger, Burkina Faso, Mali and Burundi.
The newest addition was East Timor, which was ranked 158th out of the 177 countries and territories on the index.
Worse than 1960s
The enormous disparity between the highest and lowest ranking countries is most striking when examining life expectancy, correspondents say.
In Norway, a child born between 2000 and 2005 will have an average life expectancy of 78.9 years, whereas a child born in Zambia in the same period can expect to live just 32.4 years - a figure lower than that in 1960.
The tumbling life expectancy in some African countries is a direct result of the HIV/Aids crisis, the report says.
In Zambia, 16.5% of the adult population has the Aids virus. In similarly hard-hit Zimbabwe, where the average life expectancy is just 33.1 years, one quarter of the population has HIV.
Ms Fukada-Parr says the devastation that the pandemic has wreaked in African countries is so massive that every facet of life is affected - not only life expectancy and health care, but the economic and educational well-being of the country too.
As a result some 20 countries in sub-Saharan Africa are suffering drastic development reversals, where standards in education, health and wealth are getting progressively worse, undoing the hard-won development gains made in recent years.
"The Aids crisis cripples states at all levels because the disease attacks people in their most productive years," said Mark Malloch Brown, head of the UN Development Programme.
Africa is home to about 25 million of the estimated 38 million people infected with HIV/Aids.
"One thing that is clear from the success in battling the disease that we have seen in countries like Uganda is that the whole of society needs to get involved if things are going to change - there must be participation from the very top of government down," Ms Fukada-Parr said.
Along with assessing quality of life, this year's human development report has also examined the question of cultural liberty and how in a world of increasing migration there can be safeguards against culture clashes and ethnic violence.
LOWEST RANKING COUNTRIES
167 - Chad
168 - DR Congo
169 - Central African Republic
170 - Ethiopia
171 - Mozambique
172 - Guinea-Bissau
173 - Burundi
174 - Mali
175 - Burkina Faso
176 - Niger
177 - Sierra Leone
The report argues that the claim for recognition by ethnic, religious and linguistic groups is one of the most urgent issues affecting international stability and human development in the 21st Century.
It points out that in two out of every three countries there is at least one substantial ethnic or religious minority group representing 10% of the population or more.
It says it has been calculated that about 900 million people belong to minorities facing some form of discrimination.
The report says cultural freedom is an essential element of development, and that economic globalisation cannot succeed unless cultural freedoms are respected and protected.