I absolutely loved the thing, once I set aside my disdain for those who would tamper so mightily with a Tolkien product.
Having said that, had we seen Tolkien's never-effected reworking of The Hobbit after LOTR, I suspect that what Jackson and Co., is very much along the lines of where Tolkien would have gone. Hints of Saruman going bad 60 years earlier (a hiccup in Wiz time) make much sense.
(and one can never have too much Galadriel)
Martin Freeman was stunningly good as Bilbo (if you haven't seen his work in BBC's Sherlock Holmes series, you should catch it).
Some of the battle scenes raged on perhaps a bit too long,but the CGI work was stunning.
And I loved lots of the banter.
The only two characters that seemed off were Thorin, who for some reason is "handsome and manlike," whereas all the other dwarves are somewhat caricature-like. And the Orc king who spoke Etonian English just made no sense at all (and his similarity to Jabba The Hutt, I'm assuming, was no coincidence).
But I'll give 9 out of 10.