It's a different medium, and the most effective change to my mind was the rearrangement of certain scenes and critical items of dialog to suit the flow of a movie better. The "many that live deserve death" lines, for example: perfectly placed in the book, but also perfectly placed in the movie.
Removing all of the unnecessary Hobbit-like unconnected "adventures" at the start was the Right Thing, otherwise movie goers would have ended up being fairly bemused at what the thing was supposed to be about, anyway.
Having Merry and Pippin incite the Ents to go to war was a fantastic idea too. As a purely personal opinion, I found the build-up weak, but the actual delivery of the coup-de-grace was wonderful, and more than made up.
Replacing Glorfindel with Arwen... when you think about it, it makes sense, otherwise you have a situation where a Major Dude comes on and does Big Stuff, then totally vanishes. Bashki probably felt the same when he put in Legolas instead.
Also, the scene with Elrond in the tent at Dunharrow - WOW!