Sterling's film version of Alice's adventures takes liberties, as any adaptation of a book into a movie must; the actress who plays Alice is too old and seems a bit awkward in situations designed for a much younger child. The animal costumes are a good effort but until computer animation came along there was just no easy way to represent talking animals...either you had to use expensive puppets or full-size actors in make-up, either way it wasn't very effective. Further, the story suffers the same problems that every adaptation faces, as mentioned above; it's just really hard to capture Alice's "world" on film without introducing a plot arc, motivation or logic into the precedings, and the lack of such things makes a movie hard to stay involved in.
That being said, I believe the movie is one of the most authentic and effective adaptations made of the books, maybe THE most effective. If it weren't a musical it would be better still, but despite some criticisms I've heard, I find John Barry's ("Somewhere In Time") score heartbreakingly beautiful. Yes, a little monotone at times but beautiful nonetheless.
The tone feels just about right...each of the characters is caught up in his or her own business which makes perfect sense to the CREATURE; that is, they aren't acting like they're insane, they're just acting in a way that makes us think they're insane because we don't know what they're thinking. But THEY believe they're "sane," they aren't just acting crazy. In effect the characters are, like in the book, parodies of real people...the mouthy, uncompromising seller of hats, the fussy, officious rabbit who always fears he's late, the imperious, by-the-books queen.
The exceptional cast that was assembled for the film helps things considerably. Aside from well-known-in-the-States actors like Peter Sellers (creepily great as the March Hare) and Dudley Moore (as the Dormouse) the film stars Ralph Richardson as a professor-like Caterpillar, Robert Helpmann (the evil toy catcher in "Chitty Chitty Bang Bang!") as an effete, snooty Mad Hatter and Flora Robson as a grand, uncompromising Queen of Hearts.
The sets are lush, the costumes are gorgeous and the music full of longing and wistful fantasy. The special effects are wonderful and the set-pieces of some of the famous scenes from both Carroll's books are effective and full of atmosphere without becoming off-putting or too scary for kids (well, maybe a LITTLE scary in parts, but that's not always a bad thing). The episodic nature of the film is very much like the book as adventures weave in and out with little cause and effect but again, that is how an authentic adaptation SHOULD be.
The movie ends up being a very authentic, smart and very BRITISH bit of entertainment that, if not an effective piece for children, specifically modern children with short attention spans, is a successful adaptation for a lover of the original books the project is based on.