This is one of my three all-time favorite movies, and I'm not really sure why. Everything just works. Rob Reiner, the director, nailed it. Peter Falk and Fred Savage nailed it. Cary Elwes, Mandy Patinkin, and Andre the Giant nailed it. Christopher Guest totally nailed it with his villain-with-the-flat-affect characterization of heartless, truly heartless, evil. Even Mark Knopfler nailed the score.
How can you not love a movie with the characters "The Ancient Booer" and "The Assistant Brute." I've watched it several times since it came out, and it draws me in every time. It's a truly iconic fantasy.
My current theory on why the movie works so well is that the characters seem to respect each other. The Dread Pirate Roberts, Inigo, and Fezzik not only respect each other as adversaries, they seem even to care while they are adversaries, making their morph into friends completely credible. It's ensemble acting at a high level, and it makes it almost necessary for us the viewers to care about them, too.