Actually, news that "The Hobbit" films – both of them – would be going forward at all was welcome news after a lawsuit filed in February by the Tolkein Estate seemed to put the future of the project at peril. Add that to Peter Jackson's own suit with New Line over royalties (settled in December) and the fact that del Toro became one of the most highly sought writer/directors in the business after the success of "Pan's Labyrinth" and it actually seems incredible that everything worked out on this one. I mean, if it can't be Jackson behind the camera (and according to New Line president Robert Shaye it really can't) who better than Guillermo?

LOTR fansite TheOneRing.net scored the first phone interview with del Toro that dealt exclusively with "The Hobbit" films - otherwise, the man is all about promoting "Hell Boy II" right now. The interview revealed the director's plans for the look of both films, his decision to try animatronics over "LOTR" style CGI effects and the fact that he has already had cast meetings with Sir Ian (Gandalf) and Andy Serkis (Gollum). GDT will be heading down to New Zealand, which he describes as "Hollywood the way God intended it," for the LONG shoot ("The Hobbit" is now due for a 2010 release) but he intends to keep fans posted via The One Ring message boards – so check those out.

Here are some highlights of TORN's interview with the man, the genius, GDT:

Question: How did this whole process get started?

GDT: I met Peter (Jackson) a long time ago when we were planning on doing 'Halo' together… When 'Halo' didn't happen, Peter and I stayed in contact on a regular basis, and last winter I started getting inklings that 'The Hobbit' may come this way, mainly from the studio. The first thing I said was that I would only be interested if Peter was involved and the (New Line Lawsuit) problem gets resolved. When that issue was resolved I got a call from Peter and we chatted, and it started from then, it was my Christmas gift!

Q: Fans are all abuzz about 'The Second Film', can you tell some of your plans for it?

GDT: 'The Hobbit', the book, is really one self-contained film, so for the second movie we sat down and worked it out. When we did this we got really excited because this second film is not a 'tag on', it's not 'filler', it's an integral part of telling the story of those 50 years of history lost in the narrative. There will be certain things that we will see from the first movie but from a different point of view, but it will feel like a volume, in the 5 volumes of the entire story. It will not feel like a bridge, I've been hearing it called 'a bridge film', it's not, it's an integral chapter of the story, and I think we're all on the same page.

Q: Films like 'Pan's Labyrinth' used a few studio sets to simulate outdoors, will you be doing the same for 'The Hobbit' or will you be making use of New Zealand's wilderness like Peter did?

GDT: I think green screen photography is exactly like CGI, it is a tool, I don't think it should be overused… What I would like to avoid is the recreation of the natural environments in CG, I don't like doing that. The movie is essentially a journey movie. I think you need to use locations as much as possible.

Q: You'll be using WETA Digital for the effects?

GDT: Yes, the essential elements for keeping continuity are on track, in the last few weeks I've been chatting with a ton of people via email, phone, and in person from the previous films. People like Andy Serkis, Sir Ian McKellen, Howard Shore, John Howe, Gino Acevedo, Richard Taylor next week I'm meeting Alan Lee. I'm doing this to ensure that whatever we do we keep continuity with the other films… What I'm trying to do is keep the elements in place but allow you to feel a progression from 'The Hobbit' until 'The Return of the King'. I believe 'The Hobbit' is a very crucial volume in The Lord of the Rings, it is a narrative that starts out very much in an innocent and golden way. It is permeated from England going through World War One, so there is a loss of innocence and a darker tone as the book and the film progresses. We'll be doing that in the first film, taking you from a time of more purity to a darker reality throughout the film, but I think that is in the spirit of the book…

Q: Do you have any roles cast?

GDT: Well, I had the most charming meeting with Sir Ian, and all bureaucracy pending, he's on board, as is Andy Serkis. We will continue giving you progress reports as they occur. It is our intention that we will not lose any of the key elements.

Q: What will differ from your films versus Peter's?

The only thing I will be pushing for more in these films that the other three are full animatronics and animatronic creatures enhanced with CGI, as opposed to CGI creatures themselves… We have every intention to do for animatronics and special effects what the other films did for virtual reality.  Another thing people will notice, at the beginning of the film will be the palette… the world will be the same but it will be a more 'golden' world, a more wide-eyed world. But by no means will we depart from the canon, we will take the three previous films as canon. When I become part of a world that I love, such as this, I really come with a lot of enthusiasm and hard work, and we know we are recreating and creating a world that is part of the mythos of millions of people and we will approach it as passionately and respectfully as it needs to be taken.

Thanks The One Ring for the great interview!!

Read all GDT had to say here.