I can't recommend this film highly enough for children of all ages! Although the computer animation is a little stiff (the characters don't move very fluidly at times), the artwork is gorgeous, with eye-popping color! Especially beautiful are the intricate mosaics decorating the homes in the Arab kingdom -- Americans may not be aware that Islamic culture forbids drawings of people, hence in this film as in many famous real world mosques Arabs developed incredibly detailed geometric tile patterns for decoration.
This film has an excellent message of tolerance for other cultures and cooperation (since our heroes wouldn't succeed without help from one another and wise men and women from several different nations and religions). It also has very strong female characters, from the heroes' mother/nanny (who explains how she ignores prejudice and superstition to move forward and win), to the adorable Princess Chamsous Sabah, who exhibits the best demonstration of a proper princessing education I've ever seen on film!
Some American sensibilities may be put off by the nanny nursing her infant children at her breast in the beginning of the film, or the scene of Asmar disgustedly eating carrion when he is lost in the desert and on the brink of starvation; but I'd hope most adults would be smart enough to watch and explain this with their kids, rather than just hiding it. These brief scenes are a part of the mosaic of life, and hiding the world from children only stunts them in the long run.