As a student of the fabulous German language, but also as a fanatical Fantasy fan, a translation of The Hobbit proved the perfect way to practice my German, all while enjoying one of the best adventure stories ever written.
The familiarity of the storyline and a general knowledge of how the story is supposed to go allows one who is not entirely fluent in German to navigate the text fairly easily. One might say, however, that this is true of any popular story one reads in a foreign language... but that is unfortunately not true.
Take Harry Potter, which I own in German, but which does not help me at all. Rowling's writing style is sparser and blunter (neither a good nor bad thing) than Tolkien's, and thus while reading Sorcerer's Stone, I found myself reading what I knew *should* have been there rather than absorbing new words and understanding how the language works.
This translation of The Hobbit, by contrast, doesn't afford one the luxury of just skimming over the words and thinking up the words that should have been there. There simply isn't enough dialogue to make that happen.
As for the quality of the translation itself, I can't really speak. Is it as good as the English version? Naturally not. Very few texts are better in translation. However, none of the fun of this adventure story is lost.
So better your German...the Hobbit way.