Wherein we learn that hobbits had rather much to do out and about in the early days of Middle Earth.
The prologue gives us a very compressed socio-political history of the Hobbits and of the Shire itself, as well as reinforcing the link of Bilbo and Frodo to the greater story arc itself. Of particular interest is the prologue's addressing of the contradicting stories of Bilbo, Gollum, and the Riddle Game, and in light of Tolkien's revisions to The Hobbit after writing The Lord of the Rings, it makes sense. It's a rather clever way of handling it, attributing it to the ring's influence and Bilbo as an unreliable narrator, rather than pretending the different version never existed.
The prologue as it is, also stands a bit as a spoiler for what's to come. If we're coming into this from The Hobbit we know of Bilbo, Thorin, and Gandalf. We have no clue yet who Frodo, Samwise, Peregrin, Meriadoc, or many others are, but we know that they play important roles, and that (especially for Merry and Pippin) they go on after our story to do great works. For those of us who have read The Lord of the Rings before, this prologue serves to remind us that the end of an age is coming.
Gorgeous use of voice over, slowly revealing the film itself. Special effects-wise I think they kept a good balance here, in particular the fact that the massive armies don't look overly mechanical stands out to me.
The history here is that of Middle Earth, the races, and the Ring itself, rather than a focus on the Hobbits and their part in the larger history beyond their lands. Cinematically, this makes a lot of sense, it gives us the crux of the setting without any spoilers and without taking up a significant chunk of time. The Lord of the Rings is a story that goes to very dark places, but has some incredible moments of light and joy. This prologue lets us know about the encroaching shadows before we start into a rather delightful and fanciful beginning, as well as setting the stage for the important role hobbits will play in the fate of Middle Earth.