I'll put it out there, I have a love/hate relationship with The Phantom Menace. When it first came out, I was in the middle of reading some awesome trilogy in the books (the Black Fleet Trilogy, I think?) and it talked about this girl Luke met who supposedly knew where his mother was or had gone.
...and then we get "Episode 1", which basically shatters anything that may have ever been written about his mother previously, and by the next book the author has had change the direction so now the girl was simply baiting him the whole time. It's entirely possible that this was intended from the start, and I don't mind that. But the notion that books being written suddenly had to be changed cause Lucas arbitrarily comes up with this hokey plot for Episode 1 and how little Anakin fell in love with some child-queen on a world we've never heard of..
Essentially, when I WATCHED the movie in theaters, I thought it was awesome and a lot of fun. Then I thought more about what I've seen, and the more I thought about it, the more upset and disgusted I felt. Except the notion of Medichlorians or whatever, I called that as bullshit the moment they brought it up. Lucas essentially diluted the wonderful mysticism surrounding the Force with Science and turned Anakan's mother into the Virgin Mary.
I'll be frank, I actually liked the characters of Padme, Quai-Gon, and even Jar-Jar. Heck, I really enjoyed a lot of the movie, especially the fights and the "Duel of Fates" track or whatever during the climax of the film. But as has been said, there's so much that the movie did wrong, or the script did wrong, or when the actors seemed to be phoning it it.
Confused Matthew said it best with "they tried to convince us that Anakin was all these things, but he never came off as any one of them" or something to that effect. If I hated anyone in the first movie, it was probably the kid.. and Darth Maul, cause wtf was up with his design? Hell, I just watch CM's Prequel reviews and laugh my ass off when I'm feeling depressed over it all.
Was the Phantom Menace as bad as everyone thought it was? I think it was the strongest of the three prequels, but it set in motion a lot of the crap we'd have to swallow to enjoy the later films. It retconned the hell out of the original trilogy which many, including myself, grew up on and greatly enjoyed. It replaced all the awesome puppetry and animatronics from the previous films with crappy CGI, removing a lot of the life and presence various characters had. It was certainly the least convincing Yoda I'd ever seen, and while I certainly laughed at the Droids I never got the feeling they were actually there in the room with everyone.
That said, Phantom Menace also gave us a few good things. I hated the Pod-Racing sequence in the movie, but I really loved playing the N64 game for some reason. Also, thanks to it we'd eventually get those awesome Genndy Tartokovsky shorts. Still, I generally like to think that the prequel films didn't really happen. It also slowly killed off my desire to read the novels, too.
EDIT: Looking at some other responses, I should point out that I do, actually, think a lot of films and shows from the 70's and 80's were better than what we have today. Maybe that's cause I grew up with a lot of the stuff, or maybe it's due to my disliking of the hip-hop genre (and how it slowly permeated into a lot of 90's and 2000's films), or perhaps I don't care so much for CGI cause I feel it lacks the presence of someone in a suit, puppetry, and animatronics. Jurassic Park has, in my opinion, the best mixing of CGI with actual effects. If TPM had been closer to that insofar as how they handled their special effects, I think the prequel films might've had a better presence and believability to them.
But that's just me.