I saw this at the cinema recently and was very impressed. Having always been a fan of Herzog and Lynch I was interested to see how much influence Lynch might of had on the film in his role as producer. The answer is, I think, a fair amount. The film is unmistakably 'Herzog' in the characterization and story with definate echoes of his classic work, notably Aquirre. Yet Lynch's influence is extremely apparent at times creating a surreal sheen to the proceedings (there's even a creepy dwarf bit!)
All this goes to create an extremely entertaining film which leaves you with plenty to ponder afterward.
A quick note on the cast - Willem Dafoe gives one of his best and empathetic performances in years. Uldo Kier crops up in a brilliant cameo role - but the star is Michael Shannon who is simply excellent, he's really turning into one of the best character actors around.
In a nutshell, the film delivers a great, tense police/hostage/siege thriller but also has a sly humour and intelligence sadly lacking from most mainstream fare.