The Unknown Family just got back from seeing The Chronicles of Narnia. All agreed that it was one of the best films we'd ever seen. Part of that is our love for the original books, but even if we weren't familiar with them, I think we still would have loved it.
We read The Lion, The Witch, and The Wardrobe to The Unknown Son and the Unknown Daughter about three months ago, and they were captivated by the story (although I translated a lot of the British verbiage on the fly so they would be able to get it). I still remember their expression when Aslan died - they were shocked, saddened beyond belief, and thoroughly taken in by the story. That night was the only night I read more than one chapter, because sending them to bed after Aslan's death without learning of his resurrection would have been too cruel (and a sure-fire way to bring on nightmares.
Their reaction to learning of Aslan's resurrection was even more marked than their sadness at his death. It showed the power of a good story.
Even though they were familiar with the story, we all had a good cry in the movie when Aslan was killed, and the kids started applauding when he rose again.
I would caution you about taking very young (or very sensitive) children. Although they were well prepped for it, the Unknown Daughter (age 5) was very frightened and sad during Aslan's death scene, and the Unknown Son (age 7) was too. Some of the battle scenes were also pretty intense.
This will definitely be one for the DVD collection. The writers, director and producers did C.S. Lewis proud - while some of the details were changed from the book, the film was definitely true to the spirit of the book.
We're now a couple of chapters into The Magician's Nephew, the second (or first, depending on which chronology you use) book of the Narnia Chronicles, and the kids were upset that we got back from the movie too late to read another chapter tonight. I guess there's no such thing as too much of a good story where my kids are concerned.