I've been known to call this The Good Prequel Film. This is an exaggeration since I also quite like Revenge of the Sith, but The Phantom Menace is easily my favourite of the three, despite its obvious flaws. It has the best Jedi (Liam Neeson), the best villain (Darth Maul) and character interaction that's fun to watch.
There are obviously things wrong with it, mind you. (1) Jar-Jar is a monstrosity, presumably meant to fill C-3P0's comedy shoes from the original trilogy but being at best dead screen. At worst he's an overacting gimp with no motivation, no brains and no reason to be in this movie. You're begging for him to shut up, or for preference stick his head in a pod engine. (2) The script has no wit or sparkle, with all the characters (bar Jar-Jar) talking like Obi-Wan Kenobi. At least the original Star Wars had characters who spoke differently and could bounce entertainingly off each other. (3) The battle droids are just Not Scary. Apparently this is deliberate from George Lucas, so he can introduce more menacing villains later (i.e. stormtroopers), but not scary is not scary. (4) Anakin Skywalker isn't allowed to do anything bad 'cos he's the hero, so Ugly Evil Dude doesn't die in the pod race and Anakin only destroys the bad guys' space station at the end *BY ACCIDENT*!!! This is the same mentality that let Greedo shoot first in the remastered A New Hope. (5) The aliens all speak in silly foreign accents instead of subtitled alienese, thus laying George Lucas open to (daft in my opinion) accusations of racism.
However these are all details. Well, except maybe Jar-Jar. I loved The Phantom Menace anyway.
While I think the story of this movie on its own is a bit hokey, I love the greater story that's unfolding. The quiet victories of Darth Sidious - sorry, Senator Palpatine - and the hints of Vader-to-come are setting up a story we know will be really nasty: viz. the corruption and destruction of the hero of this movie! And he's a kid! (Okay, we know from Return of the Jedi that he'll repent before he dies, but not before killing or enslaving half the galaxy.) With Star Wars, the saga is definitely greater than the sum of its parts. Even with the original trilogy, A New Hope takes a good while to get off the ground and Return of the Jedi goes tits-up on Endor.
The Phantom Menace always offers you two stories at once - the immediate story (our heroes are winning) and the long-term story (our heroes are heading for hell in a handbasket). If viewed that way, it's a rather subtle and interesting viewing experience. Senator Palpatine is a deliciously understated villain, not to mention portrayed by the film's best actor (who's obviously having a ball).
But even considered in isolation, there's a lot to like here. The acting didn't win any Oscars, but imagine how bad Jake Lloyd could have been as Anakin. Imagine all the Hollywood brats you've ever seen on the big screen. Personally I thought he did a surprisingly good job, even showing little flashes of temper in Watto's machine shop on Tatooine. Also when any other child would be relaxed and having a laugh (at the final victory parade, for instance), there's always something a little brooding and distant about him. Darth Maul runs away with the movie and the final lightsabre battle is so cool that I'm prepared to overlook half of the four-way action climax being rubbish. Both Anakin and Jar-Jar only win by accident! Of course the climactic battle for Naboo doesn't really mean anything. It's a pause, not an ending... but even so I could have lived without "General Jar-Jar"'s Comedy Antics (TM) against the battle droids. Nevertheless 50% rubbish is still 50% better than the culmination of Attack of the Clones
Though the pod race isn't as gripping as it should be either, since the whole thing's nothing but authorial whim from beginning to end. There's not a character decision in there to be seen.
Liam Neeson makes a refreshing action hero. After we've watched a wearying procession of flippant killers with attitude problems in big-budget Hollywood no-brainers, here comes a Zen hard guy! He can take out an army single-handedly, but he's polite, courteous and soft-spoken. When trapped behind an energy shield during his final fight with Darth Maul, he just sits down and meditates. I can see why some people found him a bit too quiet, but I thought he was awesome and one of the best things about all of Star Wars put together. All on his own, he makes this film worth watching.
Frankly, the youngsters let the side down. It's Ewan McGregor, Natalie Portman and Jake Lloyd. The latter I can forgive. He's a kid. His line readings are mostly adequate and, what's more, he does a better job than McGregor and Portman! I don't have a problem with Ewan McGregor either, who may be a complete blank as Obi-Wan Kenobi but at least would grow in stature in the sequels. What's more, that was clearly deliberate. No, the real crimes against cinema are perpetrated by Natalie Portman, who's only alive in her scenes with Anakin. (If only she'd had that much chemistry with Hayden Christensen!) Everywhere else she seems suffocated by her dialogue and by the film's sheer scale. She's barely a presence. She dwindles away to nothing when a ballsier performance could have turned Padme Amidala into the human heart of the prequel trilogy. She should have been unforgettable. She should have been funny! Admittedly she's a lonely, confused girl who's uncomfortable with her role and is thus squashing her own identity for the sake of duty (as symbolised by that business with the doubles), but that's enough about Natalie Portman's real-life problems! Her line delivery's boring. If she'd been any blander, they'd have been wheeling her around on life-support.
Nonetheless, this is a lively line-up of heroes. It's got more variation than any of the other films, even in 4-6. We've got Liam "Zen" Neeson and his "yes, master" padawan, an annoying CGI frog, a nine-year-old boy and a princess who actually seems like a princess (unlike Leia) because she's the head of her planet's government.
The film clearly has problems, although it's better than we thought it was in 1999. There's no need to go around saying "it'll all make sense in the sequel", for instance. It makes sense just fine. Anyone who can't follow The Phantom Menace has no business being let out in public without their nurse. Instead it's: (a) a flawed but amusing roller-coaster in its own right, and (b) simultaneously effective as episode one of a larger story. Much of its narrative tension comes from what's to come. It's a story about evil overcoming good, in which the "no, it's too dangerous" stuffed shirts are actually right and our cute little hero will end up turning to the Dark Side, getting almost killed by his best friend and helping the Empire conquer the galaxy. Is that cool or what?