I've owned this movie for at least 10 year and my children and I have watched it over and over as they have grown. I have just bought extra copies for my young nieces. It's charming and funny and will entertain anyone from about age 4 up. The key elements of the story line are easy to follow and the children in the movie do some of the strange little things that kids do when confronted with unusual situations, which make them seem real and endearing. Sometimes the translated dialogue comes out a little clumsy, but for me, it adds to the charm.
Don't worry if you are not a fan of anime or are turned off by the coarse looking character animation -- by about 15 mins into the movie you won't even care. This is classical animation, not multi-billion polygon computer animation, and Miyazaki and his animators create gorgeous backgrounds that capture glorious mixes of form and shadow for their characters to play in. My kids and I have often commented when traveling, "Those look like Totoro clouds" or "Camphor tree!! Camphor tree!!".
Pick up this classic - you won't be disappointed!