This was a brilliant idea that was expertly realized by Seth McFarlane. The CGI in the film is spectacular, and unlike other films that blend live action with animation (computer-generated or otherwise), there was never a moment when you didn't feel that Ted was in the room with the other actors (Who Framed Roger Rabbit comes to mind).
This movie has more laughs per minute than any movie I've seen in the last several years, and Mr. McFarlane (to his credit) does not fall back on the Family Guy model where they just throw as many jokes as possible and hope that 50% stick. In this winning film almost all the jokes land well and flow organically from the plot and premise.
Shockingly enough, Ted actually is pretty touching at sweet near the wind up. Overall, I would say that I had big expectations based on the trailers I had watched repeatedly over the last several weeks, and Ted delivered.