I bought the expanded version of the dvd for Fellowship, and have watched a good portion of the bonus material/interviews.
Jackson stated that he wanted to take the main themes of the story line and incorporate as much literal dialogue as possible.
However, a literal translation of the book itself would have required a movie much longer than the already 3 hours for each of the two parts already released.
I'm sure that there are purists that were offended by Jackson taking liberties with changes in the screen version. But then again, including scenes such as Bombadill would do little more than extend the movie length. I haven't seen Towers yet (hopefully soon), so no idea how it compares with the book (all three of which have I recently re-read)
The bonus material is very interesting to watch, partcularily all of the WETA design/special effects, and Alan Lee and John Howe being involved as conceptual artists.