I've completed the enormous Shire, full of side-quests and treasure to find, and must say this game turns out to be much better than I thought. It's a Lord of the Rings game and it was made by Interplay, so I thought the fact nobody ever mentions it must mean it's really terrible - otherwise it would be bound to become a hit. Well, it's far from being terrible.
Though I can see that the floppy version must have been less inspiring - no automap, and bloody manual passages to read (one big reason why I could never get into Wasteland...). Also, the CD version has snippets of the 70's Bakshi cartoon - awesome!
I played it. To me it felt like a poorly done Ultima 6 clone. The characters moved to slow, interacting with the world and npc's was uncomfortable and the colors made me sick.
I love the atmosphere of Bakshi's Lord of the Rings, and I love the way those decades - 60's and 70's - interpreted Lord of the Rings and fantasy in general. And the game obviously follows that. But it's just too damn ugly.
And apparently your experience pretty much matches mine. Nice review. :)