I think visually, it would have been hard to improve on the films..... the sets, and the costumes were excellent (apart from perhaps the slightly froufrou armour sported by Haldir and co! and the Rohirrim's blankety cloaks) and where they deviated from the books (eg Legolas's pair of knives) I liked the rationale of using an asian style of fighting to suggest an ancient and sophisticated culture independent of the more familiar ( to a westerner!!) western style weapons and fighting. The Shire, Bree,Rivendell and Minas Tirith were as imagined.
Lorien well what we saw of it was fine but I would have loved to see a mallorn properly but maybe that was just too impossible to create. Nevertheless, not being into fightscenes I would have rather seen more Lorien and less cave troll ...sorry that was a minigripe.
I think using Alan Lee and John Howard was the key. They are such genuine fans of the books and their vision of middle earth was familiar from the book illustrations.