Starwarsgeek had it closest, IMO. I like the way you review movies, MovieBob, but I'm finding I disagree with you more and more. I am a fan of the show, but I did not automatically hate the movie as so many others did.
The script was the worst part of the movie. MNS seemed allergic to lifting lines directly from the successful cartoon known for its excellent dialogue and character development. I haven't seen any of his other films, so I can't say about the state of his career.
Why did they push the timeline back to 3 years instead of 3 seasons?
Most of the actors deliveries were stilted and almost mechanical, except Aang's martial arts. You could really tell when Aang and Katara were practicing side by side who was the true martial artist and who was faking it. I couldn't care less about 'racebending', only quality of acting.
Sokka's character was consistent with the first couple of episodes (where he was overprotective of Katara on their dad's request) and the last couple of episodes (where he was smitten with Yue). Whereas the cartoon played his seriousness for sarcastic laughs ,later picking up the verbal comedy, the movie tried playing it straight where it fell over on its face.
Katara's character was completely gutted. Half of Sokka's lines (about 3/4 in the first half) and Aang's big hope speech should have been hers. She doesn't even really step up and introduce herself until she fights Zuko near the end.
Zuko's character was pretty close. He was really only missing the familial soft spot for Iroh.
Aang's character was emo instead of childish. What is it with the entertainment industry making EVERYTHING emo? He came closest when he just entered the southern Air Temple and pretended everyone was hiding from him.
Iroh's character seemed closer to Professor Zhang's than Mako's Iroh. He lacked subtlety, humility, and humor.
Zhao's character lacked subtlety, anger, and impatience. And, I hated that almost squeaky high voice and the circumstances of his demise - where was Aang's giant spirit fish-monster??
Ozai's presence was unnecessary, not to mention his dialogue probably the lamest in the movie; how in the world did Zhao travel that fast to visit twice and still stage the invasion?
Appa was about a size category too small with a mouth 2 sizes too small. Momo was there: that was about it.
Much of the martial arts action seemed conserved to offset them as special, which I feel was a waste for an action movie. I also agree with the others that there was too much time wasted 'prepping' the bending with elongated motions. I agree with the sentiment that imprisoning earthbenders anywhere but an iron rig was stupid. The special effects were nice, but - to quote Yahtzee - what isn't these days? I don't really blame MNS for standardizing firebending to really let Iroh intimidate the way he did, but I also don't think it was that necessary as the cartoon had an awesomeness analogue to offset elite firebenders from the standard army mooks - just ask Mako's Iroh why he was known as "The Dragon of the West". The costumes may have been nice, I wouldn't know, I had trouble distinguishing them from the background, both done in generally dark and gloomy colors. The 3D effects I think peeved everyone off because, for the most part, they were sunk into the screen (as a post production cash-in move) rather than integrated into the full range of people's vision, which is what most people expect from premium 3D ticket prices. The spirit world was nicely done as a setting, but almost flippantly used; in the show, Aang had to be somewhere or do something special to get there. The narration was overdone and in some cases redundant - better dialogue would have sufficed for explanation of what was going on.
I think it's a shame that they skipped the Winter Solstice sequence (which would have showcased Aang's lack of training, Avatar Roku -whom I sorely missed-, and the spirit world) in favor of a Haru-less "Imprisoned". They could have shown the map, an Indiana Jones-esque traveling dotted line, and fan service clips of episode scenes fading across the screen to demonstrate the passage of time, Katara and Aang's practicing, Zuko's relentless pursuit, and the rekindling of hope that the Avatar's returned on the way to the northern Water Tribe (not to mention potential visual Sokka gags and supporting character cameos in the background), instead of just talking about it and cutting there. I also think that MNS was getting ahead of himself by making Aang have as much trouble with waterbending as he does with earthbending in the cartoon - it was unnecessary and time consuming. Also, kids never openly admit they've run away to random strangers (not that I know of, anyway), especially not kids with personal transportation and a culture of wandering; the penguin sledding question would have been much funnier and quirky, even if they decided to have Katara answer 'no' and leave its meaning to non-fan's imaginations. I much preferred the cartoon's version of why Aang ran away versus the movie's.
All in all, this was no "Lord of the Rings" nor "Bridge to Teribithia" nor "The Lion, the Witch, and the Wardrobe", but on the other hand it wasn't "Dragonball: Evolution" nor "Dragons of Autumn Twilight" nor "In the Name of the King" either. It was about par with "The Lightning Thief" or "Eragon" or "The Golden Compass"; movies with serious flaws, but not complete crap.