Calling a Miyazaki film "magical," "whimsical," "captivating" is redundant: Miyazaki-san is all these things. (Give the man a Nobel Prize, already)
For its latest, Studio Ghibli re-imagines Hans Christian Andersen's "The Little Mermaid," the story of a magical sea-dwelling nymph (this time a "fish" called Ponyo) who must win the unconditional love of a human boy in order to become human herself. Where Disney chose to make the story a classic good-versus-evil, princess-in-distress, love-conquers-all drama, "Ponyo" retains an air of cherubial wonder by firmly planting the story in the real world (a small island off the Japanese mainland) and letting the story unfold through the eyes of children. The result is nothing short of fantastic.
Some typical traits of Ghiblii films make a welcome appearance here: the lack of a solid antagonist (Miyazaki's villains are never all-bad, just awaiting redemption), moments of inexplicable horror/wonder (oozing sludge monsters and waves that crest the moon), and an intense attention to detail (check the realistic detail of young Sosuke running with a pail full of water or a lonely octopus creeping into his house).
The cast of English voice actors is likewise stellar: Tina Fey is perfect as the young boy's tenacious mother; Liam Neeson - sounding a little too old at first - does admirably as Ponyo's frantic father; and a host of other talent (Cate Blanchett, Matt Damon, Betty White, Cloris Leachman, Lily Tomlin) round out the roster. Frankie Jonas, as "protagonist" Sosuke, and Noah Cyrus, as the titular Ponyo, do a fantastic job adding life to the young children. Overall, the voice acting is rather understated, but this quality makes perfect sense in Miyazaki's realistic world.
Personally, I don't think this installment quite measures up to Miyazaki's phenomenal "Spirited Away" (2003), but it is in no way a bad film. Add this to your (grand)child's library. In fact, add it to your own library.