With lofty expectations, and cast in the shadow of the much beloved Lord of the Rings trilogy, Peter Jackson faced a large task. What results is a film that, though definitely flawed, is charming, enjoyable, and imaginative. At the same time, we also have a prequel that doesn't have the polish or dramatic power of the Lord of the Ring series, and thus serves as a mixed bag as an entry in to the universe.
The acting is strong all around, with Martin Freeman having an especially strong showing as Bilbo Baggins. He has just the right amount of charm, self-doubt, and quiet strength that the role requires. He's a perfect fit, and is matched well by a very talented supporting group, including Ian McKellen and Richard Armitage.
Technically, The Hobbit is another exercise in brilliant visualization. Jackson yet again displays an amazing visual sense, with breathtaking CGI, beautiful cinematography, and remarkably imaginative and uniquely executed world building. These elements are what keep the film engaging through its slower elements.
What The Hobbit struggles with, in comparison with the Lord of the Rings series, is it's overloaded, and often unfocused, script. The film is simply too long. This is a symptom of taking what could have easily been a one (perhaps 2) film story and stretching it out to a trilogy. There's too many story-lines, and too little follow through. We feel like the film is constantly building to something, but we never experience any real resolution or effective climax. Instead, we're treated to too many rabbit trails of plot lines and references. It's too concerned with set-up, and not enough with story. This makes the film drag, in parts, it's 2 hour 46 minute run time is felt, something the Lord of the Rings films always avoided.
At the end, The Hobbit is an enjoyable ride. The imagination, the characters, the visuals, it's all strong. What's missing is a narrative that both builds up and satisfies at the same time, with the decision to add in so many things keeping the film from really finding itself. Still, for what it does well, it does very well, and is engaging enough for even casual fans of the series to enjoy.