So I think your enjoyment of this film is going to depend on your tolerance of whimsy, and how important you think 'coherence' is vs. 'emotion' in a movie. Personally, I think Michel Gondry's newest film is terrific, an ode not just to movies in general but to what they mean to us as people, as members of a society and a larger culture.
This isn't a movie like Sky Captain and the World of Tomorrow (which I hated) or Sin City (which I liked), where the filmmakers get off on rehashing the cinematic achievements of yesteryear. Gondry is smart enough to illustrate the process of movie literacy: most of today's filmmakers start like Be Kind Rewind's Jack Black and Mos Def, literally re-creating scenes from their favorite movies verbatim, as those kids who made the shot-for-shot Raiders of the Lost Ark remake did, or as way too many people who go to film school do - when I was at USC it seemed like half of the class projects were cheap imitations of the style of 24 or Scorsese or Borat. But after a while that gets boring (for some people - for others, never) and you have to move on to telling your own stories, and Gondry dramatizes this in a lovely way, by showing a distressed, working-class neighborhood uniting under the spell of homemade art, finding both escapism and self-reflection in their own stories.
Special notice needs to go to Jack Black and Mos Def for their easy-going charm and improvisational skills, but also to the rest of the cast for simply acting like real people, not movie people, the kind who pop into a film just long enough to deliver some exposition or get saved from peril by the hero. Gondry could use a little more discipline in his screenwriting, but I'm happy to take some messiness if the result is this sweet.
One extra notice: I was mostly lost in the recreation scenes of Rush Hour 2 because I'm pretty sure I never saw it - I assume Gondry was obliged to include at least one high-grossing New Line movie, and since Peter Jackson was suing the company, the Lord of the Rings movies were out. Kind of sucks, but it's probably better that we didn't have to deal with Jack Black's impersonation of Austin Powers.