Gee, what a surprise, no CGI can do justice to "broken-down drunk exiled prince of the armored polar bears." But The Golden Compass was not nearly as incomprehensible to those who hadn't read the books as I thought it would be. My wife quite liked the movie and hadn't been prepped for the story (other than by me saying things like "The books are Lord of the Rings good"). For one thing, the movie starts by explaining there's a multiverse, that daemons are souls, and that Dust is central to tying everything together.
My biggest problem with the movie, actually, was that it lacked Pullman's spine of suspense and discovery. Compared to the books, it was just one damn thing after another. I had other problems, too, like the alethiometer ("golden compass") being a freaking television set when the whole point was that it was symbolic.
The movie was actually more openly anti-Magisterium/Church than I remembered the first book being, which goes hand-in-hand with the overall simplification of the text: there is no question from the get-go who are allies and enemies. On the other hand, at this point the Magisterium is presented as a pseudo-militaristic fascist power and you'd have to be wound pretty tightly to bristle at what's on the screen. (Now, how they can do the third book without the anti-Narnia stuff being on the screen, I dunno'.)
CGI's come an incredible way, of course, and fur seems to be a done deal (Pan as a wildcat was done well, and for that matter, Pan in general was very good, with lots of shapeshifting). I think with big animals (like, say, armored bears) they're still falling short. They don't give proper attention to musculature (which is amusing, because if you look at 300 or Beowulf, you see an attention to human muscles that borders on fetishistic). One of the sublime moments in my life was seeing the back of a blue whale flex as it dove and seeing the flex of muscles 3 feet wide. Power, more than scale, is what is humbling about large animals.