The former Mrs. Parker Bowles was selected for her dramatic, star-crossed love story that culminated on April 9, when she finally wed her Prince Charming.
As for Walters' nine other "most fascinating" people of the year, they are:
Tom Cruise: America's No. 1 opponent of prescription drugs, champion couch-jumper, bane of Brooke Shields' existence ... and soon-to-be father of fiancee Katie Holmes' child.
Condoleezza Rice: On Jan. 26, 2005, Rice became first black female Secretary of State.
Jamie Foxx: Won Best Actor Oscar early this year for "Ray," and was the first African-American to be nominated for two Oscars in the same year.
Kanye West: Rapper famously said "George Bush doesn't care about black people" during a live Hurricane Katrina telethon.
Thomas Mesereau: Successfully defended Michael Jackson against child molestation charges.
Lance Armstrong: Cycling champion won his sixth consecutive Tour de France this year, faced accusations of doping and got engaged to rocker Sheryl Crow.
Ubiquitous child star Dakota Fanning appeared in "War of the Worlds" and "Dreamer" this year.
Beth Holloway Twitty: Mother of teenager Natalee Holloway, who mysteriously disappeared while on spring break in Aruba.
Teri Hatcher: Before Hatcher became a "Desperate Housewife," she was best known as a washed-up actress.
The New York Post's Katherine Pushkar contributed to this report.