For one thing, the film didn't need any more comic relief. Now it's got Kili hitting on elf chicks, one of whom turns out to be a dude.

And a scene where Elrond and another elf discover the dwarves naked and bathing in a fountain. Also, Bofur gets up on a table and sings the song that Frodo sang(*) in Bree, and is then pelted by vegetables. We're left wondering if the dwarves cleaned up their mess the same way they cleaned up Bilbo's house.
( * In the book and cartoon, that is. The song wasn't used in Jackson's FOTR, but Peter, Fran & Philippa are into repurposing dialogue. Witness Cate Blanchett's voice-over at the very beginning of FOTR, partially lifted from Treebeard's dialogue in "Many Partings" of the ROTK text, or the Tom Bombadil role played by Treebeard in the TTT EE. )
And we get an additional full-on musical number from Dame Edna's Great Goblin. I tried to justify this scene by telling myself "We know he likes singing because of the Torture Song, so this scene sets that up!" But it wasn't working; the Torture Song is at least tolerable. At this point we're in Return of the Jedi Special Edition territory. Has Peter Jackson become George Lucas?
Now to the good stuff:
I liked seeing Bilbo as a child meeting Gandalf for the first time.
There's additional dialogue in the "White Council" scene in which the seven Dwarf-rings are actually discussed, and it's mentioned that Thrain had one of them. ( It's not pointed out that it was originally possessed by Thror, or that the ring factored into the great accumulation of wealth in Erebor, but these things can be inferred. ) I was pleased by this because I had wanted to see this mentioned somewhere in the theatrical cut. I mean, it's The Lord of the RINGS, not The Lord of the Ring, so it's good to see some of the other rings included in the narrative. And of course this may set up something down the road...
Bilbo finding the shards of Narsil is nice, but it doesn't have any apparent connection to the rest of the plot. There's an added scene in the tunnel leading to Rivendell, where Bilbo can feel the presence of magic before the city is in sight. This is interesting because it shows that Bilbo has midl-earth-chlorians.
