The films were literally stuffed with good actors so it's very difficult to think of the best one, but this also has the advantage of making the weaker actors stand out. In many cases, where a character was messed about with a little too much (e.g. Faramir), I am prepared to allow for this. In the case of Faramir, I think David Wenham did a decent job with the part he was given; it was wrong, but he did offer up a sensitive portrayal. But I'm not prepared to allow for it in every case. This will sound rather catty but I found Liv Tyler a little wooden in the films. Yes, the role was 'beefed up' and that will colour my opinion, but I found her a little too expressionless. She is a beautiful woman, and seemed at times merely to concentrate on portraying Arwen's beauty; seeing as they did 'up' the role of Arwen, I think she could have put a little more into it. Now you're all free to call me nasty.
However, I was disappointed with much about how the Elves came across - they were almost too ethereal at times. I did not picture Elrond in the manner that he was portrayed in the films, but he did come across as truly powerful, unlike some other Elves I dare not mention.
The best Elven portrayal was Galadriel though - apart from the 'scary moment' she played Galadriel very powerfully.
Its hard to pick a 'best' portrayal. Part of me wants to go for Bilbo because Ian Holm did him so well, and he is my favourite character anyway. I also want to go for Bernard Hill's Theoden as he played him with real gravitas and brought tears to my eyes when he was mourning his son's death. Sean Bean was splendid as ever as Boromir; it seemed a part made for him. And Ian McKellen was an excellent Gandalf. But I think, all in all, my vote would have to go for Christopher Lee as Saruman. He was a character I could not entirely fix on a visualisation for in the books - his image kept 'shifting' (as does his character!) and I saw him more on a 'tjhought' level, as in I saw how his mind was working and heard his voice, but no picture came up. But Chris Lee was perfect. He was sinister, commanding, not a little frightening, and perfectly controlled.