How'd they make the hobbits and the dwarf shorter?

[Tar-Palantir]

Aragornreborn, you should really try to rent or borrow a copy of the extended version to see all their techniques. Some of them are really amazing, like when Gandalf hands his hat and staff to Bilbo at Bag End, I love that shot. Many props in Bag End and elsewhere were built in two sizes also, mugs, utensils, room decor, the one ring, other clothing, doors, counters, wagonwheels and wagonposts, and on and on.