I think they did a smashing job of transferring it to the screen. When you think about it, every movie is like 3 hours long, and they had at least 45 minutes of extras for each movie that they put in to the bonus DVD. With the size of the books there was just no way they could include everything.
But to think that because they left certain things out showed any lack of respect for the source material is wrong in my opinion, from the DVD extras such as the making of: series, they really really really really love the books. I'm sure they would've kept Bombadil in, time permitting. but when you think about it, it really doesn't add too much to the overall plot. It's a bit of filler, really.
Would have been funny if they had copied everything from the books into the film though. Imagine the Council of Elrond? xD