Mom here: I'm the scifi parent, and I raised our kids on Tolkien. I loved this animated LOTR (helped further my interest in Middle Earth), so when it was available on home media, I bought the family a copy (video, DVD, then BluRay).
Oh, but then our First Born wanted his own copy, now that he's moved out. Great. Now I see I have to buy another copy (this one).
Personally, there are certain scenes in this Ralph Backshi animated version that hit the mark that Peter Jackson ever so slightly misses.
1. Animated Strider mysteriously introducing himself to the Hobbits: "While I look foul and feel fair, is that it?"
2. The Black Riders are just creepy. And Leonard Rosenman's score is haunting whenever they're around.
3. Galadriel's test at the pool seems more organic all the way around: Sam's worry about his "poor old gaffer" and the gardens. Frodo's reluctance to look,or even discuss what he saw. And Galadriel's revelation how the Elves hid the three rings, and yet one day, when the One Ring is destroyed, everything, including the Elves, will fade. All of that is this side of quiet drama versus the explosive scene caught up in Jackson's vision (which I admire, but not as much as this version).
4. While the animated (rotoscope) version doesn't do much between Orc and Uruk-hai, the scenes with Merry and Pippin are just as good as their live-action counterparts. Merry and Pippin's confusion in who Gollum is, and enticing their captors with the pretend knowledge of the precious is clever, if not sad (at their lack of understanding).
5. Seriously, I love this Gollum!! Getting on Sam's nerves, freaking out at the Elvish rope tied on his ankle, sneakin' around - this Gollum is so good!
When the very first LOTR-live action trailers hit the internet in the fall of 1999 (nearly 20 years ago), our sons were 8 and 4. So nearly 20 years later, they still love Tolkien, and enjoy both visions of the separate projects (Bakshi 1978, Jackson 2001-03).
Which means, they want their own copies on Blu-ray.