Anyone who has read The Lord of the Rings knows that eventually the fellowship is broken and the other characters break off and start their own journeys. When you take a book like The Lord of the Rings and turn it into a movie, you have to condense it down to the central story, while at the same time serving justice to the stories of the other characters. This is done extremely well, giving each character their due.
Before The Lord of the Rings movies, director Peter Jackson was known for doing horror movies. This kind of background definitely shows during the battle scenes. However, the intimate dialogue scenes are handled with extreme care as well. As The Fellowship of the Ring is the start of the journey, naturally there are many shots of the group walking to different destinations. These shots are very dynamic, and you really get a sense of how arduous their journey is, and will be.
I thoroughly enjoy fantasy writing. Obviously for these movies, they did not just take the book and turn it into a script verbatim. However, you do get the sense that they wanted to do J.R.R. Tolkien justice in the script, and they do so immensely well. My personal favorite exchange of dialogue is in The Fellowship of the Ring. In the mines of Moria, Boromir inquires, "What is this new devilry?", and Gandalf replies, "A Balrog. A demon of the ancient world." That is fantasy writing at its finest.
The entire cast does an excellent job of capturing their characters. For me in particular, there are two performances that stick out. First is Ian McKellen as Gandalf. In my opinion, this performance is the greatest of his career and it certainly carries the movie. Second is Elijah Wood as Frodo. I was never a big Elijah Wood fan, however it never ceases to amaze me how good he is in this movie.
I absolutely love when movies combine practical and digital effects, and this movie does that superbly. The Moria sequence is particularly breathtaking. When you read the books, you wonder how they are going to bring this world to life. Then, you see the movie and it is exactly how you imagined it.
Years ago, I personally do not think you would have associated a name like Peter Jackson with The Lord of the Rings. However, he has proven to be one of the few directors who is able to do a sweeping epic film. He cares about the story first and foremost, and that is what makes him special.