We saw this at AMC Columbia (MD). The color in the movie was extremely dark (despite a complaint to the staff), making it unpleasant to watch. I don't think it was as good as the earlier Shrek movies. A lot of the kids watching were very bored, evidenced by the level of noise in the theatre.
The story was delightful without being overly sentimental, and the horse itself was life-like and cute. It is set on a Loch in Scotland during WW2, and explores the myth of the Loch Ness Monster through the relationship a young boy, has the waterhorse. However, unbeknown to us, the movie theater apparantly had some technical problem, and we saw most of the film in black and white, which made parts of it very difficult to watch. I suspect that in color, the scenery must be very beautiful.
The best thing about the movie was the magical toyshop. Neither the acting nor storyline were particularly inspiring, and I couldn't get away from seeing Natalie Portman still as Padme from Star Wars, and waiting for the lightsabres to come out. Besides that, it certainly isn't the worst movie I have ever seen, but I doubt I will see it again (and won't buy it on DVD). I'm glad I only saw this as part of the AMC Summer Movie Club, as I would not have been happy to pay the regular rate to see it.