Physically the elves and hobbits were well done, the chief
foolishness was Elrond's portrayal. It was silly to portray
Agent Elrond as a vitual "man and Aragorn hater", since he and
his children were half-elven, his brother the first king of
Numenor and Aragorn was a descendent of Elros. While it
would have taken (only) a modicum of movie explanation,
I thought ignoring the half-elven theme in LOTR in the movie
was an error.
Oh, and how about a bit of sexism in the movie? Only showing Arwen's son and
not her two daughters.
Galadriel and Celeborn were well-done (Celeborn a bit redeemed in the
extended dvd) , except for Galadriel's over the top bit with the ring
temptation. It would have been better played understated (the same for
Gandalf with Bilbo), but then that's not PJs forte.
However, I've been listening to LOTR tapes driving, and there are
subtle bits of faithfulness to the books in the movies I've previously
missed.
Also about Kate Blanchett. One of the reasons I consider FOTR to be by far
the best of the three movies is her opening narration.