I won't dwell on the purists' outrage over Bakshi's liberties with story or characters. For the most part, they are correct. I'm certainly not coming to the filmmaker's defense, but in the context of the material's density, animation technology of 1978, et al., this guy really took a swing at bringing this thing to the silver screen.
Sadly, the film wasn't that good. Much of the animation was disjointed, and most of the backgrounds were crudely drawn and failed to create the correct atmosphere that one gets from reading the book. I will say, though, that I have always liked the rotoscoping, in particular that of the orcs. There is something exceedingly frightening about the way they are displayed, something today's CGI characterizations seems to miss. Bakshi used this technique in his other works as well, particularly in Wizards, which is a better, if different, film than his version of LotR. But mixing purely-drawn characters (hobbits) with those that are rotoscoped (orcs) just didn't look right here.
I must agree with some others who assert that some of the frame direction and scene selection is oddly similar to Peter Jackson's version of late. And if Jackson was influenced by at least SOME of the look of Bakshi's film, then what's the harm?
If you want to be dazzled, this version of LotR probably won't rouse you. There's many more misses than hits. But it isn't as bad as many would have you believe. If it weren't a Tolkien adaptation, I think it would be received much better.