First, let me make it clear I'm not criticising Tolkien's work or the work of Director Jackson. It was a well-executed film and a splendid production. What got my attention was the character design of 3 out of 5 of the main villains. The unhuman characters which were evil all had flaring nostrils. There is Lurtz the Uruk-hai, played by Maori actor Lawrence Makaore. Then there are the 3-D animated characters of Gollum and the Balrog, which both have flaring nostrils.
Since this the main cast is all-European (by European I mean ethnicity, not nationality), and Tolkien's novel, though a fantasy, was clearly in an European setting, should the evil creatures not have European features like straight pointed noses too?
I think we have internalized the idea of non-European features like broad, flat noses with flaring nostrils as ugly, and therefore appropriate for creating evil-looking characters. I am sure that LOTR isn't the only film which uses this convention. It is somewhat disappointing that people of color in the movie are cast as villains. I would rather not see ANY people of color in a movie than to see them cast only as villains. LOTR was envisioned in a European setting, and it would not at all be considered "racist" if the movie had no non-white actors at all. But using non-white features to identify the evil characters is something else.