Better than just great battle scenes. I'm not a fan of action movies that spend heavily on crashes, fires, and other special effects, but skimp on the screenplay. Kingdom of Heaven, however, is an action epic about who rules Jerusalem at the time of the first Crusades, but with a decent and interesting plot.
While it contains some historical characters, it is a fictionalized account. One of the things that is historically correct is that King Baldwin (actually Baldwin IV) did have leprosy, was retained as king despite that, led troops in battle and even defeated Saladin in one. Also, when the King was still young, he did have a regent, Raymond III (1140-1187), Prince of Galilee and Tiberias, who the film only calls Tiberius (Jeremy Irons). Also, princess Sibylla (Eva Green), sister of Baldwin IV, did marry Guy of Lusignan and there is some historical claims about her involvement with Baldwin of Ibelin, but not Balian of Ibelin (Orlando Bloom), who actually was a younger brother of, and vassal to, Baldwin of Ibelin. But there isn't anything in the few historical sites I looked at about Balian ever being blacksmith.
Liam Neeson, as usual, impresses, although in relatively short part, as Godfrey of Ibelin. (The actual name of the historical father of Balian of Ibelin is not Godfrey but Barisan.)
What makes the plot interesting is the moral code of the hero, (played by Orlando Bloom) and his father. It gives a morally sympathetic treatment of Saladin and Islam; its treatment of Christianity favors Christ's teachings about doing good being more important than rituals, and mocks false piety of a medieval Christian priest and bishop.