I am no great cinema scholar, so I will mostly avoid purely directorial aspects. I will focus on writing. The writing in the LOTR movie trilogy is very bad when it comes to characters and dialogue: all of them, but most egregiously Aragorn, Arwen, Elrond and the hobbits.
The problem with the psychology of the characters is (a) that such a thing even exists, and (b) that it conforms meticolously to Holllywood tropes. As for (a), some early critics of the LOTR novel blamed its characters of lacking any psychological depth. You know what? They were right. What they omitted to say is that Tolkien’s work, while technically a modern novel, was entirely inspired (thematically) by medieval epic and (to a lesser extent) chivalric romance. These (now defunct) literary genres lacked anything like “psychological development” of the characters in the modern sense. Characters were what they were, there was no medieval Forster or Svevo! It should not be seen as flaw, but as a feature. Did it work? In my opinion, it did. But apparently, Peter Jackson thought it did not, or at least, he thought that it would not work on screen. The result is that he deprived many prominent characters of their (epic-styled) motives and replaced them with new ones (more psychologically rooted), which were more likely to be accepted or even recognized by the movie public. Hence my point (b) above: his characters think and feel like ordinary commercial movie characters.
The most blatant example is Aragorn. He is made into the stereotypical reluctant leader. He is insecure, you know, but everybody knows he is the man, so eventually he will set aside his doubts and lead the good guys to victory. This is entirely (really!) absent from the original. In fact, the opposite was true. Many doubted him, but he was confident. Why? Because he was Isildur’s heir. In an epic mind set, this is no opinion or state of mind, it is a mere fact. Tolkien’s moral is pretty clear from a close reading of the novel. The desire for power corrupts (Gollum, Saruman, Boromir), so the only wise thing to do is resist the temptation (Gandalf, Elrond, Galadriel, Faramir). The only good power is legitimate, God-given power (Aragorn), one that you do not look for, but it is yours in spite of you or anybody else. An anachronistic mentality, if you like, but much fresher and less conventional than the usual movie tripe.
Arwen’s and Elrond’s cases are almost as serious. Arwen takes a lot of space in the movies, probably because Eowyn was not enough as a female action hero. Still, her character is distorted to an incredible degree. The love story between her and Aragorn, as narrated in the Appendices to the novel, is charming in style and transparent in meaning. Elrond’s conduct was responsible and honourable. All this is wasted in the movies. In the novel, Arwen just chose to become mortal in order to marry Aragorn and live among Men. That was it. Elrond was sad at the idea, and so was she, but such choice was her prerogative. Elrond never tried to oppose her choice with manipulation and lies. On the other hand, he put as a condition for his consent that Aragorn became King of Arnor and Gondor: his daughter’s hand could not be given to anybody less majestic. In the movie he does all sorts of stupid tricks to force Arwen to give up, then he only reconsiders because for undisclosed, blatantly ad hoc reasons, she falls ill and her life is tied to the One Ring, so it becomes imperative that the good guys succeed in their mission. This does not make the slightest sense, and it also changes the wisest and most authoritative figure in the novel into a petty family tyrant.
The hobbits now. First, the choice of making Frodo younger is unfortunate. It is obviously done to please the prospective demographic, but it destroys much of the meaning in the hobbit characters. Also, the different social standings of the characters is obliterated. In the books, Merry and Pippin are the equivalent of teenagers. They also belong to the elite of the Shire families, so they sometimes come out as spoiled kids. Sam is somewhat older, but most importantly, he is a solid, commonsensical working class character. He is also curious and adventurous, but never one to forget the simple pleasures of life or his everyday duties. Frodo is a middle aged hobbit, a bit of an intellectual, and a prominent Shire citizen. He is a comfortable upper middle class citizen, and is not ashamed of it. Sam is his servant, not his friend’s. Not one time this is forgot in the novel: in the end, when Sam marries Rosie, they move to Frodo’s home to be his servants (more Downton Abbey than Friends, if you know what I mean). In the movies the four come out as a bunch of adventurous teenagers, one of which (Frodo) is a bit of an emo and two others (Merry and Pippin) are your good old stoners, only there for comic relief.
Call them “minor changes”, but this is stuff that alter dramatically the content of the story, and is more than enough to say that Jackson’s adaptation is not a great one. Notice, by the way, that for its many flaws Ralph Bakshi’s partial adaptation was fundamentally innocent of these sins. Yes, it omitted a lot about the characters, but it did not changed them. In the next entries on the blog I will happen to point out various aspects in which Bakshi’s often ridiculed animated movie did in fact much better than Jackson’s.