I saw "The Hobbit" today. On a scale of 1 to 10 I would put it at a solid 8. I'd definitely recommend it. It loses two points - first, for violating Rod's Rule of Action Movies - which is "faster is not better" and the second for being two indulgent is a wide variety of establishing scenes and shots. It would have benefited for a more judicious editing.
However, even with both of those sins - I definitely liked the movie and I would definitely recommend it. In fact, I would take that a step farther and say is was actually better then I expected. It passed The Watch Test with flying colors. (The Watch Test: The sooner and more frequently you check you watch, the worse the movie is). In this case, I checked my watch about two and a half hours in - but it was not a movie quality check. It was more of a "okay, I drank the large diet coke, can I make it to the end of the movie..." check. I did, though, find it was amusing to watch the mad sprint for the bathroom on the part of a lot of the spectators.
Cate Blanchett is barely in the movie, but I love her as Galadriel. I count myself as a Cate Blanchett fan, she's an incredible actress. Richard Armitage is outstanding as the dwarf Thorin - he brings a certain gravitas to the role that clearly sets himself apart from the other dwarves, which is consistent with the character, the character is forged from a different metal then the rest of them. Martin Freeman shines as Bilbo and of course, how can you possible go wrong with Ian McKellen as Gandalf? So, again, all in all, I recommend The Hobbit.