We saw Pan's Labyrinth last weekend, and I thought it was good, but not as good as I hoped. 
It is by Guillermo Del Toro, director of Hellboy, Mimic, and the classic Chronos. It is a sort of sequel to his earlier film The Devils Backbone, and has a similar mood. He described Pan's Labyrinth as a 'feminine' movie to balance Devil's backbone which was more of a 'masculine' movie. I can see this very well- they are both set during the Spanish Civil war, in brooding environments where death comes quick and often. the protagonists are both children who are in a sense orphaned and uprooted from their happier homes.
The Devils Backbone has a strong element of fire and metal to it, and seems to revolve around the themes of war and regret. Pans Labyrinth focuses on the elements of blood and milk- as it is revolving around the themes of treachery and sacrifice. They both deal with a supernatural mystery hidden down below the earth that only the heroes can see, but at the same time there is parallel drama taking place among the adults related to the civil war. in the end the supernatural horrors end up being much less frightening then what the adults are capible of by the end of the stories.
It is nice to see that Pan's Labyrinth was nominated for so many Oscars, but I think the supernatural storyline was a little weaker then it could have been, and the Human story line ended up dominating the movie. Which might be why it was nominated- alot of what happens in that storyline is classic Oscar friendly stuff. On the other hand the Devils Backbone has a much more balanced and integrated feel between the two storylines, but the final 'message' is less Oscar-ish, and so it pretty much passed with much less recognition when it was released. But the popularity of Pan should give this earlier movie some added recognition now.
And of course Del Toro has said that he is making a trilogy of pictures, so I am curious to see what the third film holds in store. After doing masculine and feminine, what will the third film's over arching motif be? It looks like it will be an announced film called 3993 which will connect the Ghosts of the Spanish Civil war ('39) with modern era Spaniards. ('93) So I will be looking forward to that.