I didn't think Denethor and Elrond were changed all that much - changed, sure, but within the bounds of interpretation and they still served the same foundational functions. Faramir was different, the movie pretty much replaced his character with a whole new one that just happened to be given the same first name.
The movie portrays Denethor as a disgusting lout deluded by his own pride. The scene where Pippen sang to Denethor as he savagely devours his lunch, really hits the essence of the change. In the movie, Pippen's service to Denethor was more or less a mistake to be regretted. In the books, Pippen served the Steward of Minas Tirith proudly, as he was a great, though ultimately misguided, man.
What Saruman did to Theoden was not substantially different than what Sauron did to Denethor, the difference is that Saruman tried to control Theoden by subverting his will, while Sauron tried to control Denethor by breaking his will. Both were good men, who succumbed to the forces of a mystical enemy. Denethor's death came when realized that the consequence for his dispair was BOTH of his sons, which was too much to bare.
In the movie Denethor was a bad person, and served as an obstacle to be overcome. In the book, Denethor had simply lost his hope. His purpose was to show the risk of dealing directly, even in opposition, with Sauron. When Pippen and Aragorn looked into the Palatir, they risked the same fate.
What it comes back to is that Denethor, Boromir and Faramir were all great men. Denethor was lost to Sauron through the Palatir, Boromir was lost to Sauron the ring (though was redeemed in death) and Faramir could have met the same fate but was wise enough to avoid it. The movie's Faramir was not wise. The movie's Denethor was not great. The alteration of both characters allowed Frodo and Sam to be in Osgiliath, and it allowed the rescue of Faramir from Denethor to be triumphant. I don't know what purpose the ring being in Osgiliath served, and Denethor's death (even having saved Faramir) was supposed to be tragic instead of something to be cheered.
to me, the strain between Denethor & Faramir in the Book wasn't as great as was alluded to in the Appendices. Read and you'll understand that Denethor's disdain for Faramir was due to the fact that he bore his mother's face. She had died out of despair because she knew she was going to live out the rest of her days in Minas Tirith, and not in the countryside where she grew up. So every day Denethor was reminded of what he inadvertantly did to her thru his youngest son.
Even though that's a great storyline to play on the viewer's emotions, there's no room to put all that in the movies. So play up the first-born favoritism instead, which can be just as effective, and quicker to latch on to.
Besides, they had already committed Pippin to "find his courage" as they left Lothlorien, so where was he going to get it? By just covering Merry w/ a blanket after the Battle of Pelennor Fields? Saving Faramir from the funeral pyre was the better option.
To be fair, Pippin worked to stop Denethor in the books. He sends Beregond to stop the guards from bringing fire so the pyre can be lit, and brings Gandalf to ultimately save Faramir.
But they can do all of those things without turning Denethor into a oaf. They can do all of those things without turning Faramir into a self-conscious twin of Boromir.
I guess the reason why it bothers me so much is that you have all of these polorized iconic characters (Elves, Maiar, Orcs, etc) and while Men are necessarily flawed, it seems as though the movie accentuated the flaws at the expense of the virtues. If the men are as corrupt as well, then defeating Sauron is postponing the inevitable.