This one is VASTLY misunderstood, and, in my opinion, taken way too seriously for its effects to actually sink in. Xanadu has great music, fun scenes, and is overall just a feel-good movie that is not meant to be taken seriously (it seems the critics didn't get that idea). It was originally meant to be a low-budget disco flick so it should at least be noted that we got something MUCH better than what was originally intended. The message of the movie is also really good (in a nutshell; follow your dreams). While the film does have its gray areas, such as in acting, there are PLENTY of positives; the music (ELO rocks!), the fun roller-skating scenes, the amazing animation by Don Bluth and his team, the finale, Olivia Newton-John, and who else.... Gene Kelly!
Review Summed Up: You honestly can't go wrong with this one unless you take it too seriously.