Denethor's madness.

[Essex]

Originally Posted by Tuor of Gondolin

Aside from Gandalf's ridiculuous phyically assaulting Denethor,
the worst bit of movie Denethor was the lack of any
character development or even character collapse.

Ok, I understand your point (in bold), but I think Jackson uses his creative licence from this part of the text.

But Gandalf sprang up the steps, and the men fell back from him and covered their eyes; for his coming was like the incoming of a white light into a dark place, and he came with great anger. He lifted up his hand, and in the very stroke, the sword of Denethor flew up and left his grasp and fell behind him in the shadows of the house; and Denethor stepped backward before Gandalf as one amazed.

[Eomer of the Rohirrim]

I think you are right Essex, but (given the opportunity) I would have told Jackson that it doesn't actually say that Gandalf bashed him on the head!

[Tuor of Gondolin]

Good point by Essex above about Gandalf using his powers
when applied to the funeral pyre, when it was clearly necessary to
exert himself to save Faramir. The problem I have with PJ's version is
1) it's used earlier without the immediate threat of Faramir being killed
2) at the funeral pyre PJ misportrays it again as just slugging
away with his staff (as quoted from the book it would have worked better).
A wizard's staff should be used basically as a conduit of power, not as
a baseball bat or club.

The hidden power in Gandalf is all the more striking when sparingly
and correctly portrayed (as PJ did in Moria).

[Boromir88]

I do agree that the beating up of the Steward was another thing that Jackson overused. The way I see it when Gandalf storms in to save Faramir, and Shadowfax rears up and kicks it, it is more Gandalf that kills Denethor, and not Denethor. I didn't see any point in that part, basically had Gandalf give Denny a little nudge on his way out.

A wizard's staff should be used basically as a conduit of power, not as
a baseball bat or club.

I would say that's an accurate portrayal of the events before rescuing Faramir. Essex's quote, Gandalf strikes him to get him to back down, to sort of scare him. Where Jackson just had Gandalf whack Denethor until he was KO'ed. It wasn't enough to hit him in the face, but he had to jab it in the gut, then get a cheap knock over Denethor's head to make sure he was out cold. I'm surprised Gandalf didn't kick him afterwards.

I think that scene would have worked well, since Denethor is running around yelling at everyone to "flee," and Gandalf sort of conks him to either get him back to his senses or shut up. But, PJ couldn't have stopped it at that, there was really no need to beat the guy until he was unconscious.

[Lathriel]

I also find that Denethor's character is static however it doesn't bother me too much because there is too little time for him to develop much. I mean the movie is already 4 hours long and then to add character development for Denethor...it would simply bring the movie down. Although Denethor is an important character he is also a very minor one. Even Faramir has a bigger part to play then Denethor does.
As for Gandalf wacking his stick at him, why not? Denethor was getting annoying anyways, and he had to shut up.

[Eomer of the Rohirrim]

Exactly. For Gandalf, physical violence is always the answer.

Seriously though Lathriel, they wouldn't have needed extra time to make Denethor how he should have been. They already took up a fair bit of time making him a complete jerk.

[Beanamir of Gondor]

This might sound naive, but in the chapter The Siege of Gondor in ROTK, which I read waaaaaaay before I ever saw the movie, I really saw Book!Denethor as a thoroughly unpleasant character. As soon as you meet him, you feel his distaste for Gandalf, his coldness towards Faramir ("Yes, I do wish that! For Boromir was loyal to me, and no wizard's pupil!"), and his utter obsession with Gondor. I only really started liking Book!Denethor AFTER he went nuts and silently sat at Faramir's bedside, white-faced.
So in one respect, I think that PJ messed up: Book!Denethor was unpleasant, all right, but essentially he really did love Faramir. That never, ever made it into Movie!Denethor's character, even if Gandalf said it out loud. That little putzy "Faramir?" at the end, right before he jumped off the Wall in flames, was nothing like what Book!Denethor said or did. I feel a little bit the same way about Movie!Denethor as I do about Movie!SiriusBlack.

As far as I'm concerned about Gandalf beating up the Steward, that was comic relief. Gimli wasn't there, so it was up to Gandalf.