As for the 'anachronistic dialog,' it was extremely intentional and would have been totally wrong without it. To our ears, the possibly more elegant speech of the period would have sounded unnatural; only by using modern language could these people sound to us as they would have sounded to each other - normal.
The acting is brilliant - it would have been very hard to find any other actor who could share a screen with Hepburn without fading away to nothing, or an actress who could have done the same with O'Toole - only two of such power could stand up to one another. And this was absolutely right for these characters - as best we know, Henry and Eleanor were both that kind of person - brilliant, witty, strong-willed powerhouses. Then the supporting cast: Hopkins, Castle, Terry, and Dalton. Granted, they weren't known at the time, so Harvey, the director, may not have realized right off the bat that he had the cast of a lifetime, but he surely must have realized it fast.
Then there's the script. Like most of Oscar Wilde's plays, you could pick it up, open it to any page, and find at least half a dozen quotable lines. No, people aren't normally that witty in real life, but a) these were VERY bright people as historical fact, and b) it's a play/movie! People don't speak in real life as they do in Oscar Wilde either, but it's enjoyable as hell to watch. Get over it!
Some things I love about the movie are that it's made clear that no matter what Henry tells Alys, Eleanor, or himself for that matter, his real love and true equal is always Eleanor, just as he is hers. Also that, despite the at least a dozen apparent power shifts in the course of the movie, at the end, ABSOLUTELY NOTHING has changed. And you can tell that with this bunch, nothing ever will change unless it's due to factors out of their control, like death.
A matter of slight historical correction to other user comments: Alys was legally betrothed to Richard; that's why she'd been raised by Eleanor.
A historical correction to the script is that John, while thoroughly detestable personally, was not at all stupid, sniveling, or whining; his actual character was actually far closer to that of Geoffrey's in the script. Very little is actually known about the historical Geoffrey except that he was actually, if anything, more of a warrior than Richard, and of course, he died quite young, leaving behind two children, the son being the legal heir to Richard, and who died at the age of twelve or so, ostensibly of disease, possibly in reality of John. This wasn't considered that bad a thing, btw, as no one wanted a child as king, and John was the only one of the whole bunch who'd spent most of his life in England itself. The English nobles had seriously resented both Henry's (in his later years especially, as he tried to carve an inheritance for John out of Europe in general, France in particular) and Richard's neglect (Richard had barely set foot in England in his entire life, and was utterly indifferent to it except as a source of revenue). Also, of course, there's no historical evidence for an affair between Henry and Alys EXCEPT that I've read at least one source suggesting that Richard used this as an excuse to not go through with the marriage itself. And there's CERTAINLY no historical suggestion that Richard and Philip had an affair, although it seems highly likely that Richard was gay insofar as he was sexual at all. Bastards of royalty were a dime a dozen in those days, but NONE are attributed to Richard, nor a whiff or rumor of any affairs he ever had. Both Henry and John, on the other hand, would chase anything wearing a dress, and this was considered perfectly normal and even admirable in a "bad boy" sort of way. However, John took it too far, resorting to rape and starvation of wives of political enemies, and this was one of numerous driving forces for the imposition of Magna Carta on him by his rebelling nobles. Ironically, by contemporary standards, at a national level John was a far better king than Richard (Henry at his best was better, but was too often not at his best, being too bent on conquest to bother to rule effectively what he already had). However, John was nonetheless personally a rather nasty man (to put it mildly), once again proving that the best men don't necessarily make the best rulers. His personal character and actions, more than his policies, drove his own nobles into nearly successful rebellion, resulting in Magna Carta, one of the great steps in English history.
Sorry for boring you silly with the history commentary - it's a period I've always found particularly interesting. You can wake up now; I'm finished.
Anyway, great movie in every sense - script, acting, score, cinematography, editing; it just doesn't get better than this.