Happy to see that some of you were able to watch it -- like you, I was completely taken aback by the quality of the production.
And as you pointed out Jessica, their budget was a mere 5000 USD (3000 British pounds). When compared with the 90-100 million USD which each LOTR film had, one is left wondering how they did it. The key is volunteer work: the entire production, as far as I understand it, was carried out by enthusiastic volunteers. The computer animators, music score writers, and support team for the scenes (the Aragorn vs. orcs finale required some 150 people on site) all volunteered to work on the film. The real cost, therefore, if one were to consider the hours invested, would be considerably higher.
As Julia pointed out, watching a film like this is also very encouraging for us fans: we could make something like this too. We already have a Galadriel :) No kidding though -- that's how it would happen. Fans getting together, recruiting others to their idea, and finding the resources to make it happen. At this precise moment, I would be unable to take part, but if anyone has seen my fb profile picture, I think I would make a convincing soldier of Gondor, or someone of higher profile in the story. That photo was taken at a knights' festival in Germany. These knights' festivals in central and northern Europe would be a treasure trove for finding and recruiting people who own "real" suits of armor, weapons, and costumes for such a film. One could also rent HD camera equipment for a good price from any European university through film studies students currently studying there.
Having some experience in making non-profit documentaries, one of the most significant challenges would be bringing such a film to completion (opposed to merely starting it). When one is wholly dependent on volunteer work, projects can be quickly derailed when other commitments emerge which draw key contributors away from the project. That is another reason why I was so impressed by "The Hunt for Gollum": its very serious production agenda, etc.
To all who have watched "The Hunt for Gollum", one thought:
While I was watching the film, the line by Gandalf in the FOTR which I feel most directly addresses and relates to the story of "The Hunt for Gollum" was the one when Gandalf is speaking to Frodo just prior to his departure from the Shire (an approximation): Gandalf: "There is one other who knows of the ring's [current location]..." Frodo: "Gollum!..." Gandalf: "I searched everywhere for the creature Gollum, but the enemy found him first...I don't know how long they tortured him, but through the [tortured mutterings], they were able to discern two words..." [Shire! Baggins!], etc.
With this line in the back of my head, I was half expecting the principal plot of "The Hunt for Gollum" to center around a race of sorts between forces of Mordor and Aragorn & Gandalf to find and capture Gollum.
This is more or less what transpired in the film, but I feel they could have added slightly more. For instance, in the scene when Aragorn encounters the larger band of orcs, with Gollum still in his bag, I was expecting Aragorn to successfully fend of the attack, but that when he is poisoned by the orc arrow (an interesting aspect considering we are only introduced to the poison arrows in Jackson's LOTR films, but never really see their effect), he would wake up to find that some surviving orcs had taken Gollum, and were now on their way to Mordor.
(I will complete this post later today -- now I must go!) ;)