Of the noms, obviously Lost in Translation but I totally understand why they chose LOTR. For the overall year, I'll have to go with The Return.

The Room

Oh hi mark.

I haven't made it through a full viewing of The Room.

I have only seen clips here and there.

Do yourself a favor and watch it fully. At least once.

Lost in Translation should have won that year hands down. Very few films feel that candid and realistic. I feel that the "romance" between the two characters was genuine and really heartfelt. Really hits you hard when you're not sure what direction your life is going in. Makes you feel good.

Again, here are my favorite movies of that year, excluding LIT and LOTR with films in bold being true favorites...

Finding Nemo
Capturing the Friedmans
Bus 174
The Station Agent (This was filmed where I live)
American Splendor
The Triplets of Belleville
City of God
28 Days later
Far From Heaven
Mystic River
Kill Bill Vol 1
Master and Commander
The Five Obstructions
A Tale of Two Sisters
21 Grams
Confessions of a Dangerous Mind
25th Hour
Bubba Ho-Tep
House of Sand and Fog
Irreversible
Elephant
Dogville
Oldboy
11:14
A Mighty Wind
Open Water
Touching the Void

Have you seen Time of the Wolf?

One of the few Haneke films I have yet to see.

I love all of these:

American Splendor
The Triplets of Belleville
City of God
28 Days later
Kill Bill Vol 1
Bubba Ho-Tep
Oldboy
A Mighty Wind
Open Water

And I'd also add Bad Santa to the list.

In all seriousness, mine would be Kill Bill vol.1, although it doesn't seem (on paper, at least) to be that great of a year in films. Bad Santa is great though.