It's a film of two halves, and definitely gets better in the second half. During the first half, the B.G. are established as fraudsters conning villagers by defeating fake monsters, which is done in a reasonably entertaining fashion. Meanwhile, the children of a small German village are being lured into Evil Clutches. This is less well done: the kids can't act, their accents are all over Europe, and the effects aren't great.
Eventually, pompous French baddie Jonathan Pryce captures the B.G. and sends them to the German village to expose the trickster that is presumably kidnapping the children. Of course, this one's real.
Most of the film is played straight, as is Gilliam's wont. Unfortunately, all of the French miliary are played as clowns and buffoons, which doesn't work for me. And I'm sorry, but a French accent isn't funny - especially when you draw out the vowels like that. At least we didn't get the "sounds like a rude word in English" joke. Personally, I'd have preferred it if some of the French characters had the wit, charisma and intelligence of John Cleese's Evil in Time Bandits.
Damon and Ledger, plus Lena Headley as the hard-bitten tracker, do okay, and if you go in expecting utter tosh (as we did), it can be an enjoyable film.
So, I think: better than expected, not as good as hoped.