There's a moment early in King Kong when unscrupulous filmmaker Carl Denham (Black) and his assistant Preston (Hanks) are trying to think of a replacement for the actress who's pulled out of the secret trip to Skull Island at the last minute - the part that will be filled by Ann Darrow (Watts).

Running through a couple of names, Preston says 'What about Fay? She's a size four.' Denham shakes his head, saying 'She's doing a picture for RKO.' They're talking of course about 1930's Hollywood leading lady Fay Wray. And the picture for RKO she's busy shooting is King Kong.

Welcome to the age of the fan director, when films are jammed with references to other films the director holds dear, the films that inspired him or her to get into the movies in the first place.

They bristled with excitement as the films from the golden age fired their imaginations on TV or dodgy VHS releases. They wanted to help create the magic the movies had given them.

While time marched on and the fires of excitement planted in those young bellies burned, two things happened. The DIY film movement gave us giants like The Blair Witch Project and Hollywood realised that kids playing with video cameras could make staggering sums of money. Suddenly they were writing bigger cheques for these backyard auteurs than they were the usual crowd.

Secondly, technology changed, and by the time the kids who loved movies were holding the reins in Hollywood, the new arsenal of digital effects meant they could share their idea of what those classic movies should look and sound like without ropey stop-motion clay models and miniatures hanging on strings.

No director embodies that evolution more than Peter Jackson, the hairy kid from country New Zealand who made Super 8 movies on his kitchen floor and ended up getting the biggest cheque Hollywood had ever written and giving us what many consider the best films ever in Lord of the Rings.

And the film Jackson sat and watched as a kid that fired his imagination so much? King Kong. If you don't know the story you probably weren't born in the 20th century. Itself a new twist on beauty and the beast mythology, it depicts a beautiful woman and a giant gorilla on an uncharted island who fall in something like love, but whose love is doomed.

Jackson is completely faithful to the 1933 original where producer Carl Denham will stop and nothing and put anyone necessary in harm's way to shoot his movie, including screenwriter Jack Driscoll (Brody) and his newly discovered leading lady (Watts is her first truly luminous role).

The possibilities for action and adventure on an island populated by prehistoric beasts are endless, and with Weta Digital, Jackson explores them all. Tyrannosaur fights, giant insect attacks, Brontosaurus stampedes - King Kong is so full of blockbuster money shots it's already bound to be the most replayed DVD in history.

Because here's what Jackson does differently from other action directors; he doesn't give in to the temptation to show off what he and Weta can do by having a steady, long shot of the action that you can see clearly. Whether it's Kong fighting two snapping Tyrannosaurs or a herd of frightened Brontosaurs crashing through a narrow ravine, he thrusts the camera (and you) right in the middle of it, and you're tumbling over in a forest of giant reptilian legs or coarse hair and snapping jaws, hardly able to see what's going on at times. It's disconcerting but it's breathtaking.

But there's more to the effects than just the dinosaurs and prehistoric whup-ass. The climactic shots as Kong stands astride the Empire State Building show an incredibly detailed vista of 1930s New York in the background. And the low angle shots of Kong running amok show similar detail. Whereas the background on Coruscant and Utapau had an inherent fakeness, you find it hard to believe Jackson didn't dress a whole city in 30's garb.

And of course, all eyes will be on Kong himself. Jackson and Universal decided not to take the Alien approach of not showing the monster, and Kong's been clearly visible in trailers for months. Given life by Andy Serkis thanks to the same motion capture technology used to create Gollum, he breathes, bleeds, thumps on the ground and beats his chest not just like an animate object but a real silverback gorilla. Eliciting emotion and character from a computer program is a big ask, but Ann shares a palpable tenderness with him.

It has to be admitted though that CG still can't truly trick us, and the most realistic Kong still goes to Rick Baker in the suit in the 1976 remake, even if that Kong did walk upright (instead of loping on his knuckles like a real gorilla). There are snippets of movement in Kong that don't quite gel.

As with most movies that become cultural phenomena however, it's not the acting, the script or even the effects. It's the idea, and King Kong is simply one of the best ideas to come out of moviedom. For Jackson it's holy ground, and King Kong is his worship. It'll make you feel as excited, terrified and elated as he must have felt.

And somewhere in the world over the next couple of weeks, a kid sitting in a cinema watching it in joyous disbelief will grow up full of fond memories of it and be given a couple of hundred million to do it all again.