Pan's Labyrinth has got it all.
It's got fairy tales, violence, the woods, fresh milk, spanish women, antique vials, fairies, pocket watches, enough fantasy to make a LARPer blush, monsters, blood, creepy paintings, long slender keys, bedtime stories, religious imagery, knives, post-civil war Spain (what's a movie without it?), a princess, underground caves, lullabies, mandrake root, afternoon sun streaming through the trees, dangerous tasks, grapes, a faun, chalk, the waxing moon, magic stones, and ambiguous lines between fantasy and reality.
It's dark, and it's beautiful, and it's violent.
Rotten Tomatoes gave it 97%!
I highly recommend The Official Website, which is streaming the beautiful soundtrack. You can browse through Guillermo del Toro's sketchbook, and you can also check out the entries for the sketchbook contest where one can submit their own fantasy drawings, the prize being winner's sketches will be included on the DVD.

i am so pleased to see that the lovely Michelle is finally writing more. i love her reviews and i have to agree that this movie is absolutely tops. cheerie-o
pan's > children of men
pan's !> children of men
I know this will make me look like a total bastard, but...I didn't really care for it. I kept waiting for that point in the movie where everyone says it "turns really good", but i'm still kind of waiting. It was pretty and all, but...yeah....
michelle-- if you haven't seen the devil's backbone (also guillermo T), you should netflix it. not as wild and crazy as pan's, but pretty scary and filled with awesome spanish metaphors.