I would say I'm no fan of fantasy films, but thinking about it, there are a few decent ones aside from LotR - which is the best one of course (yes, despite the story errors!).
Excalibur is a classic. It's very over the top, but then when you want to watch something about King Arthur then you want mad and far fetched! Though Merlin reminds me a little of Leonard Rossiter.
If sci-fi is being included, then I've got the Star Wars trilogy and still haven't watched it but I remember it as being good. I also enjoyed all the Matrix films, even the ones which pontificate. But my favourite sci-fi has to be Close Encounters - which I wouldn't class in this category as its mostly earth bound and doesn't feature any kind of secondary world.
One I can recommend is the BBC adaptation of Gormenghast. This really
does leave out a lot of the book, but the sheer drama of it is well worth seeing, plus it's got a fabulous cast, including Christopher Lee as Flay. Also
The Box of Delights, an early 80's adaptation from John Masefield is also now available, which is worth watching, particularly if you like a bit of nostalgia like me.
Spirited Away, a Japanese animated film which was a massive success has been recommended to me, but I haven't got around to watching it yet - apparently it takes at least two viewings to properly grasp the story.