Bad stuff first. Let's be honest, that's why were all here.
Let's complain about the cinematography for a while. (1) Even in HFR, there are some scenes where motion blur is required, and it needs to be painted in if it doesn't happen naturally. For example, the scene where it is snowing, and you see the snow in front of actors' faces, would have greatly benefited from motion blur on the snow. It's very chunky snow, and snow that big shouldn't just pop into and out of existence. Similarly, some of the rapid fight scenes should also have been blurred. The vast majority of motion in the film is luxuriously smooth, and it's jarring to see the strobe effect when things start getting fast. (2) The cinematographers & directors just don't understand how a 3D film should feel to an audience. Quick cuts, hand-held cameras (or equivalent CG effects), and crazy swooping camera positions DO NOT MAKE SENSE in 3D, and make even less sense with HFR. It's almost nauseating. (Almost). With this level of realism, you need to return to stage ideas. Take a cue from Les Misérables (the stage musical). The stage can move, but there better be a reason for it. It needs to make sense. This team may be filming in 3D, but they're directing for 2D. Stop it. Stop it! (3) Some of the close-ups looked perfectly flat, or worse yet, projected onto a tilted flat surface. I have no idea what to say about that, except that I'm glad I only noticed it twice. It's almost like it wasn't finished.
My other major gripe about this film is the writing and acting (and directing), which SHOULD combine to produce characters you care about, because you understand them and their lives. I know the source material for The Hobbit doesn't really lend itself to that. I don't care. It's not my problem. They should have made it work, but instead they clearly said "f--- it". There are a grand total of zero interesting characters in this film, including the two title characters, although they are slightly closer to being interesting than the rest. Ultimately most are merely cogs fit into a machine that produces a defeated dragon in the upcoming 3rd film. We all know what's going to happen. We want to feel it. Where is the feeling?
And the credits, which I sat through, just sucked. Bad. Really, Peter?
The good stuff.
This film is not just a middle film, and it does deliver the goods you were looking for. Fortunately, The Hobbit's "middle film" was got over with first (Sorry, Gollum). This is really the first film that matters in The Hobbit trilogy. You don't even need to see the first one to understand it.
Some of the images on screen were really, really beautiful. They remind you what the artists of cinema can do (like in Avatar). One of many shots that I found remarkable was just after Legolas leaves his home to search for Tauriel, and finds her. It's just an amazing image of the two of them there in the landscape (and to be clear, I am speaking of the landscape, not them).
Once again, cinema has crowned a new dragon. It happens every once in a while, and we've come such a long way since Dragonslayer (1981). If you do not actually feel the heat on your face from this one, you're not breathing. I'm going to miss him when he's gone. I know he's "the bad guy" but honestly almost nobody has good motives in this film anyway (and I think that's the point of the story). He just wanted to sleep with his (admittedly stolen) trinkets and now people have come to kill him.
As thrilling as it is when it happens, I am surprised that we see Sauron in this film. True, we sort of saw Sauron in LOTR prior to his ring-finger getting lopped off, but we never really saw Sauron in all his fiery glory. This time we do, in a stunning battle with Gandalf the Grey. I'm not sure what to think of it, but it was spectacular to see. Also somewhat interesting is the not-subtle suggestion that Smaug and Sauron are more than simply on the same team, evidenced by their near-identical eyes, and use of the same voice actor.
And the first song during the end credits was very good. I wish I could have heard it over the bustle of people heading for the exit... (Peter, this is why you need to make credits INTERESTING again).
In summary, I am very glad I saw this film, but it should have been better. I am expecting better from the final film in the trilogy. And I hate that you're making me wait a year to see it.