First up, the question that every fan asks -- how well was it adapted? IMO, about as well as is possible. Mind, it's been five years or so since I last read the book, so I don't remember every last detail, and it's clear that a lot of details were chopped. But they managed to preserve the main spine of the story, along with most of the really vivid moments. The most conspicuous alteration is that the heroes are just a little too good at what they do -- they don't feel quite as normal-human as in the book. But they still aren't exactly "superheroes" -- they're more like something at the level of a modern martial-arts movie, preposterous without quite being impossible. (And the bad guys *are* mostly ordinary humans, so the fights come out rather lopsided.)
They did change one very important element near the end, ostensibly in the name of shortening things a bit, but I couldn't find it in me to mind: they keep the high concept from the book properly. Indeed, I have to admit that, from a pure story-elegance POV, I find the movie's variation more elegant than Alan Moore's original. (Basically, they replaced a moment that, when I originally read the story, provoked a loud "WTF!?!?" from me with a version that plugs more neatly into the overall storyline, and makes the ending just a tad more poignant.)
It's visually pretty faithful to the book -- indeed, moreso than I would have expected. Not as slavish as Sin City, but they did often choose to follow the original art, especially for the more vividly memorable scenes. It's rather strange seeing that flat Dave Gibbons coloring replaced with vivid CGI, though.
So the purist might argue, but they don't commit the sin of V For Vendetta -- preserving the story but missing the point -- and I'm much happier this time around. Frankly, I think it compares best with Lord of the Rings, which I thought did a similarly good job of getting the important bits of the original across.
Then the question asked by the non-comic-geeks: do you have to read the book to appreciate the movie? Here I'll say firmly "No" -- I think the movie captures enough that you can fully understand what's going on entirely from it. The comic has a lot more detail and background, and is well worth reading, but I suspect you can appreciate that after the fact. Just keep in mind that the comic's art is very intentionally unspectacular, so after seeing the SFX in the movie, you may find it weirdly plain-looking.
I'm not going to go into details of what the movie is *about*, because you learn that as you go so it's hard to avoid spoilers. Suffice it to say, this is a world that developed masked heroes -- although mostly not of the "super" variety -- in the 1940's, and explores where things go from there. It's an exploration of what kinds of people would take up the mask, and the dangers of trying to make the world a better place.
As a movie I think it's quite good, but you have to be prepared for the pacing: this is *not* a typical frenetic modern action movie. Indeed, one of the curious things about it is that not only is it set in an alternate-history 1985, it *feels* in some ways like a movie from 1985. They let the story unfold at its own speed (again, following the comic closely), and never rush it along. I thought it was delicious, but be aware that this isn't a rip-roaring action-adventure superhero story, and those used to the speed of typical modern films may find it slow. (And given that it's long to begin with, that's a danger.) That said, I never felt like it was dragging: there's just an enormous amount of story to tell, and they wanted to get it all in.
Casting was brilliant all around, and the acting just right -- while I don't think they were any Oscar performances here, all of the characters were well-captured. In particular, I was able to forgive my greatest qualm from the advertisements (the fact that Nite Owl is *way* too buff in his costume) because out of costume the actor captures Dan's charming dorkiness perfectly. And Rorschach is pitch-perfect, and therefore kind of creepy: intense, ordinary and even grimy, with an angry misery that just pours out of his eyes. (On the occasions that you see them.)
I will warn that the movie earns its R rating in every respect -- it is *not* for kids. There is a fair amount of sex, and the simple fact that Dr. Manhattan prefers not to wear clothes. (In other words, they didn't cut any of the nudity from the book.) And it is even more explicitly violent than the comic: while there aren't a huge number of fight scenes, they do include quite a bit of blood, guts and gore.
Summary: a solid A- in my book, both as a movie and as an adaptation, and well worth seeing. I will probably see it at least once more in the theater -- this is a movie that benefits from the big screen, and is just plain delightful to immerse myself in...