[Zigûr]

I think that as unsympathetic as some people might find Denethor in the books, he still has a certain dignity to him. In the films he's this grubby, messy slob who's more barking mad than melodramatic in despair. To me in the books Denethor feels like a real person whereas I feel like the film depiction has him as a rather effortless caricature of an incompetent politician.
To digress slightly further for a moment, I think Denethor is actually a very impressive example of Professor Tolkien's skill as a writer. The Steward appears in what, three chapters? Yet in my opinion at least, by the time he is proclaiming the doom of the West from his pyre I feel as if we have known him for years. Critics who are skeptical of Professor Tolkien's ability with complex characterisation should look no further than Denethor.

Anyway, to return to what Inzil said, let us consider again Professor Tolkien's remarks in Letter 183: "Denethor was tainted with mere politics: hence his failure... It had become for him a prime motive to preserve the polity of Gondor, as it was, against another potentate, who had made himself stronger and was to be feared and opposed for that reason rather than because he was ruthless and wicked."
Denethor was conservative and politically minded, concerned with the maintenance of the status quo. Professor Tolkien observes that his motives were the main issue. He opposed Sauron not because it was a moral imperative to do so (and metaphysically speaking it was as Sauron was evil's representative in the Third Age) but because he feared change.
"I would have things as they were in all the days of my life... and in the days of my longfathers before me: to be the Lord of this City in peace, and leave my chair to a son after me, who would be his own master and no wizard's pupil."
Sauron, really, desired the same end. A realm built on the One Ring would last as long as the Ring lasted, in perpetual stasis, stale and stagnant. After Morgoth's defeat, Sauron ultimately could not resist the urge to attempt the same thing on an arguably lesser scale with himself as supreme ruler. Perhaps he could manipulate Denethor so well because they were alike in this way. When Denethor beheld the black sails of Umbar in the Anor-Stone, his chiefest despair was the end of Gondor and, thus, change. After his suicide, Gandalf told his servants: "so pass also the days of Gondor that you have known; for good or evil they are ended."
Like Sauron, Denethor hated change. The Noldor had suffered the same delusion in the Second Age. One of the prevailing virtues in my view of Gandalf is that he understands one of Professor Tolkien's most significant themes: change is inevitable, but it does not have to be bad.