I have to gauge how the younger set deals with the intricate plot. I believe that the scenery and action carries much of the day for this younger age group. Interesting plot replacement of Glorfindel with Evenstar. It works.
I was initially underimpressed with the casting of Galadriel, but was won over [with reservations] in later scenes. My wife pointed out that the ability of the Men to deal with multitudes of Orcs strained credulity. I explained that Orc size onscreen was somewhat constrained by actual human actor attributes, and that the Men (though not the equals of their forefathers) in the trilogy had the physical characteristics of the Dunedain.
I find their handling of the Isildur/Strider nexus to be most excellent. This is a very subtle thing in the book, and must needs be changed for the screen. It's interesting watching it unfold, because it is a significant change in Tolkien's original story line, and requires nuance to make it work. They did not re-forge Narsil in Rivendell, but I believe that this omission will significantly improve their chances of bringing off what I consider to be the most crucial part of the book/film.
Christopher Lee & the actor who portrays Gandalf are superlative.
The director has done it. I am not at all offended or troubled by the plot changes, because Jackson respected the original text. Tolkien himself well understood the nature of storytelling, and presentation.
I'm not saying that he would have approved of this telling, but while grumbling under his breath, he would have looked twice. ;-)
Peter Jackson is doing the same thing with a couple of other things in the book which are fairly subtle, like the whole Saruman - Sauron Axis. Bringing out the Palantir early and highlighting Saruman's connection to Sauron does this well. The movie implies that Saruman was basically enslaved to Sauron but I dont get that from the books at all. My reading was that Saruman had turned evil but he was hoping to challenge Sauron for the title of Ultimate Dark Lord. It will be interesting to see how Jackson develops this Theme in the next movies.
The descent of Orthanc from a beautiful Garden into an ugly Orc-pit was not explicitly highlighted in the book but obviously must have happened, Tolkein just didn't feel like writing that part ;-). Peter Jackson has some guts in exploring areas of the book not explicitly written about but he pulls it off well and I appreciate it because I am seeing new things about the story that I did not see in this way before.
I am eagerly awaiting the next movie for the scenes of the battle of Helm's Deep and the Ents cleansing Orthanc.