This is perhaps the best-crafted film I have ever seen. There have been previous attampts to make films of LOTR, all of which were rather weak. It is hard to imagine that a film could ever surpass this rendition, in terms of the skill of production.
Like Harry Potter it has superb casting, immaculate setting, skillfully-crafted screen play, supreme attention to detail, and solid respect for the original books.
On casting and costume, I have not before seen a movie so many of the actors within which looked familiar but which I could not place. I recognised Merry as being played by the same fellow who is Hettie Wainthrop's sidekick, but I quite failed to place Gimli as the actor who was Indiana Jones's fat Egyptian friend (as well as many other roles) even though his eyes were so familiar. The androgenous elf Legolas looked familiar and yet I can forgive myself for not placing him from Wilde. I felt I knew Boromir well, but had to have IMDB tell me that he was in Patriot Games and Golden Eye and he will ever be Boromir now.
I think the camerawork must have been superb. Hobbits are smaller than drarves, and elves tall and Gandalf "imposing", and in spite of the actor playing Gimli, and Elijah Wood's human size, the film made the sizes appear pretty right. Occasionally there are shots where size was weakly implied (perhaps in numbers of actors and distance, not angles) but altogether the impression of relative size is excellent, if short of what animation can achieve.
Shortcomings? Yes, but as with HP I can put all down to the needs of film. One critic said that "this was a film of a reading of the book" more than a film of the book, and this says where most of the losses through "crystallisation" of an imagination-powered story into a visual report come in. What factual changes appear can be explained easily: Bombadil is almost a sideline and is cut to fit the film in 3 hours. A fight between Saruman and Gandalf is portrayed to keep the plot clear, and because such can be done well in film these days. (It is worth realising that Tolkein did not like film, and presumably thought that his tale could never be properly caught by that medium.)
However, some interpretations veered from what I expected. I thought that the film was terribly serious compared to my remembered impression of the books. The telling of the tale at a speed I have never before experienced (the first volume of 2 books in 3 hours) gave me a new overall view of Tolkein's masterpiece that reeked of Catholicism. I had read William Good's paper to the effect that Catholicism from Tolkein's mother's conversion pervaded the work, but I could not before see it. My readings of LOTR did not hit me as ones full of ominous sadness and dread, yet the film could be called heavy, tearful, almost cheerless in large patches.
Also, the hobbits are portrayed as less proactive in the film than Kay and I found them in the book. It is hard to say whether this is a shift aimed at fitting the necessarily-condensed events together better, a director's personal interpretation, or a concious change in the story for dramatic effect. I would find the latter harder to forgive, for in most respects and in stated intent, the film is true to the work of JRRT.
Hard to rate this film. I'll say 9/10; if the film, and indeed the original tale, has any profound theme beyond what can be read from character, I missed it. Otherwise close to flawless for the format.