Last Action Hero has to be the most underrated movies I've ever seen. I've seen it at least four times, but I still like it. Stuff the critics and enjoy it for what it is: a spoof of action movies and their clichés. It's something that probably hasn't been done before and hasn't been done since (because this was undeservedly bashed, I'd say). I would say that it was poorly received because audiences expected a mindless Rambo or Terminator-style film, rather than a satire.
The plot concerns this kid Daniel Madigan. He leads a pretty poor life and the only good thing that happens in it is that he gets to go to the movies to watch his favourite movie(s), Jack Slater with Arnold Schwarzenegger. He finds a golden ticket and travels into one such movie: Jack Slater IV. Madigan marvels at his good fortune and observes the many action movie clichés: a police officer getting blown up two days from retirement, Jack Slater evading every blast and machine-gun burst that comes his way, the bad guys never winning, the attractive daughter and not one unattractive woman to be seen. He also witness a whole array of unrealistic characters, including an animated cat and Robert Patrick (AKA Liquid Terminator from Terminator 2), as well as the stereotypical screaming boss. Let's not forget the big explosions and loud noises that always take center-stage in action movies. The sidekick also always get into trouble (i.e when Madigan plays chicken with a car). This is truly brilliant stuff.
If Last Action Hero has a flaw, it's that Daniel Madigan himself is excessively annoying and this doesn't bode well, as he is a major character.
However, that only has a slight effect on the rest of the film. I've said it before, I'll say it again: This is an ingenious satire, a spoof of action movies and their clichés. Not only that, but it is entertaining in a mindless way as well. It is not perfect, but it is about ten times better than the critics say it is.
Ignore them and see this film.
4/5 stars
EDIT (1/4/2013): This movie is slightly more flawed than I remembered. The second half does drag a bit while Austin O'Brien remains annoying. Still grossly underrated though.