I am glad to see that LotR and Peter Jackson finally got overdue Oscars. I'm not sure that RotK is the best of the three movies, but there were no other legitimate contenders this year either...unlike in previous years, when I felt Chicago was a better movie than TT and FotR deserved to win but lost to another great movie.
I haven't seen Lost in Translation, so I can't comment on Bill Murray, but I thought Sean Penn was very deserving for his performance in Mystic River, and I generally can't stand Sean Penn.
I have no opinion on the other categories. I am shocked by how few of the nominees I've seen. I guess, seeing as how I've been averaging a movie every two or three months, I shouldn't be shocked.