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And yet, when he was talking to Frodo, he went all bezerk with "let me hold it one last time..."
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The reason he "went bezerk" was because the ring still had power over him. Frodo understood that the ring had to be destroyed, but he still ended up not wanting to destroy it. It had nothing to do with understanding the power of the ring.
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I think that you can tell from the movie that Bilbo never found out what the ring was. I haven't read the book all the way but I don't think that he ever does!! Well, gotta run.
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dont base your opinion on the movie. They abbreviated the Council of Elrond quite a bit.