The books are probably the greatest literary masterpiece of the 20th century; in fact, they are. They are beyond excellent, a level unabtainable by most authors. Some think it drags, with all the stopping for resting and songs, but that's what's so great about them. They have a sort of laid back feel, which for some reason makes me feel right at home when reading them.
The movie are the best films of the 21st century, without a doubt, and one of the greatest cinematic masterpieces of all time. They omitt things, and change details, but they embody the very essence of Tolkien and what he wrote. Watching the bonus features on the DVD, you can tell every last person involved with the film had a passion for it, and that really comes across on screen. I really have no complaints about the films, because for once, they didn't dumb it down for american audiences, like with 99.9 percent of Hollywood adaptations. The ending of FOTR is so strong, so moving, that I was almost crying at the end of it, and is possibly my favorite film of all time. I remember when it first came out, and I saw it with my Dad on opening night, how magical it was.
So for me, the films and the books are about equal. They are different mediums, and let's face it. A straight adaptation would have been boring. They made all the right moves with the films, and now we have two great ways to experiance Lord of the Rings.