Definately the best of the three prequels; in fact, I'd say Lucas should have made this in three parts rather than waste our time with the first two.
Spoilers after the jump.
I say that because Anakin's conversion to the Dark Side happens in a flash. One minute he's arguing with the Bad Motherfucker Mace “L” Windu about whether Palpatine needs to die right-here-right-now or should stand trial. And when Windu attempts to take the right-now option and Anakin takes his arm, you can understand how the events have come to this - since Palpatine claims to have a cure for Padmé's upcoming death.
But then, immediately after Palpatine throws Windu out the window, Anakin goes and pledges undying loyalty to the Dark Side and stalks off to slaughter children. I'd even swear the film was so surprised it jumped itself at that point. And, in what appears to be a very short time later - some twenty minutes or so in the movie - he's been de-limbed, poured into the Vader suit and is standing watching the Death Star take shape (which, assuming the “humans” in Star Wars grow at our rate, won't see any action for a couple of decades (see update at end) - Hamill was 26 when making Star Wars, but we can assume he was playing a bit younger).
Thinking back over the two earlier prequels, it really seems to me that the only plot of any importance was Padmé and Anakin falling in love - and unless you have a thing for statutory rape, that didn't really happen until the second one. The rest of the stuff, with the trade wossname and the evil Japanese aliens and... er... whatever else happened in the second one, seems kind of irrelevent. Perhaps Lucas really needed to have started with Anakin becoming Vader in The Phantom Menace - but I guess he wanted to end on the iconic costume.
This is turning rather more negative than I expected. I did enjoy it and the special effects are excellent (though, in an attempt to make the background look alive, I guess, it appears Padmé's apartment is situated in the middle of Coruscant's equivalent of Spagetti Junction - ack, more negativity!). The fight scenes are impressive, even without Ray Park's input (you know... I've even forgotten the name of his character) and what happens to Anakin is cruel, but justified. Hey... managed one without a snide comment - though you'd think it'd be warmer fighting two feet away from molten lava... bugger.
In conclusion then: should have made the last hour of this one over three films, including Darth going after the remaining Jedi. I'm going to stop now.
Update: According to the Wikipedia entry on The Phantom Menace, that takes place 32 years before the original movie.
Additional: Anyone else think the fight scene between Yoda and Palpatine looks like they're riding the head of a giant penis that penetrates the council chambers?
bwhahahahaha penis ahhahahahahaha
i've not seen the movie yet, but i hate suspense so whenever i see something with spoilers about a movie i may one day see i always have a look