Yes sir, that's my baby . . .

At the 77th Academy Awards ceremony in Hollywood on Sunday night (the early hours of yesterday morning on this side of the Atlantic), Sidney Lumet was going on stage to receive his honorary Oscar for lifetime achievement, having been nominated four times in the past as best director - for 12 Angry Men, Dog Day Afternoon, Network and The Verdict - without ever winning, writes Michael Dwyer, Film Correspondent

As the audience rose to give Lumet a standing ovation, the camera picked out Martin Scorsese in the third row. Scorsese looked emotional, partly, no doubt, because a good friend finally was receiving overdue recognition from the academy after almost 50 years as a film-maker - and partly, perhaps, because Scorsese feared that this might be his own fate some day. As it happened, when Scorsese later took to the stage, it was to present another honorary Oscar, not to receive the best director award that has eluded him throughout his career.

Going into the ceremony, history was on the side of Scorsese's latest movie, The Aviator. In 18 of the past 20 years, the film with the most nominations went on to take the best picture Oscar, and The Aviator led the field this year with 11 nominations, well ahead of Clint Eastwood's Million Dollar Baby and Marc Forster's Finding Neverland, which had seven each.

For the first half of the ceremony, The Aviator looked like it could sweep the board, winning in four of the first five categories in which it was nominated - art direction (Dante Ferretti), costume design (Sandy Powell), supporting actress (Cate Blanchett, who plays Katharine Hepburn in the movie) and film editing (Thelma Schoonmaker). The run of success was broken only when Morgan Freeman won the best supporting actor Oscar for Million Dollar Baby, eclipsing Alan Alda, who was nominated for The Aviator.

However, of the next six categories in which it was nominated, The Aviator took just one more Oscar - best cinematography to Robert Richardson - and the tide turned in Eastwood's favour. Million Dollar Baby won its second Oscar when Hilary Swank was named best actress, another when Eastwood took the penultimate award, for best director, and the film completed its triumph by taking the all-important Oscar for best picture.

"I watched Sidney Lumet, who's 80, and I figured, I'm just a kid," quipped Eastwood, who turns 75 in May. "I've a lot of stuff to do yet."

Age was a recurring theme in his acceptance speech. He thanked his art director, Henry Bumstead, who will be 90 in a fortnight, naming him "the head of our crack geriatrics team". And Eastwood noted with pride that when he won his first Oscar, for Unforgiven, his mother was with him at the ceremony and was 84 then, and that she was with him again at this year's Oscars, at the age of 96. He thanked her for her genes.

The academy voters rightly thanked Eastwood for the enthralling and deeply moving experience that is Million Dollar Baby. The groundswell of opinion had been that Eastwood would not win the Oscars for best picture and best director this year because he had won both awards for Unforgiven, and that Scorsese would have to win this time, as he was on his fifth nomination for best director and had never won the award. It did not seem to matter that The Aviator is, for all its visual style, ultimately a sprawling, clumsily structured picture, whereas Million Dollar Baby, one of the finest American movies of recent years, is a textbook primer in classical film-making, with a rich, astutely observed screenplay and a trio of central performances from fine actors on exceptional form - Eastwood, Swank and Freeman.

For an actor who made his mark playing violent avengers, The Man With No Name and Dirty Harry, Eastwood has surprised most people with the sheer subtlety, unfussy style and consummate skill of his best work as a director, and those qualities permeate his quietly smouldering and emotionally powerful new movie.

Despite the ostensible familiarity of the scenario, Eastwood seductively draws the viewer into the world of three lonely, bruised people, to the point where the viewer becomes wholly immersed in them and their fates.

Eastwood plays Frankie Dunn, a Yeats-spouting Irish-American Catholic who goes to Mass every day, is "learning Gaelic", and runs a small gym in downtown Los Angeles. An unreconstructed traditionalist, he is less than pleased when Maggie Fitzgerald (Swank), a struggling waitress and strong-willed pugilist, starts using his gym, until his caretaker (Freeman), a former boxer who lost the sight of one eye in the ring, persuades him to take her on.

Against this macho backdrop, the movie develops a tender, deeply involving surrogate father-daughter relationship between the trainer and his new protégé - for whom he acquires a green cloak emblazoned with a harp and the words, "Mo Cuishle".

When Swank accepted her best actress Oscar for the film - her second time to win that award in six years - she declared to Eastwood in the audience: "You are my Mo Cuishle."

Hers was the most tearful speech of the evening. "I don't know what I did in my life to deserve this," she began. "I'm just a girl from a trailer park who had a dream." Her performance in the film is such a wonder to behold, in and out of the boxing ring, that one almost could forgive her for reeling off the litany of agents, lawyers and publicists she went on to thank.

There were more tears when Jamie Foxx, the hottest favourite in years, collected the best actor trophy for his remarkable portrayal of Ray Charles in Ray, and he broke down as he remembered his late grandmother and all the encouragement she gave him.

Although we were spared the numbing predictability of last year's Oscars, when the third Lord of the Rings movie, The Return of the King, won in every one of the 11 categories in which it was nominated, this year's ceremony was subdued and awkward for several reasons, frequently prompting the viewer to wonder how the film industry, which exists primarily to manufacture entertainment, falls down so embarrassingly when it comes to producing a show that honours its own.

In a desperate attempt at innovation this year, the award presentations took on three different forms. In keeping with tradition, some awards, the most high-profile prizes, were announced from the stage and the winners made their way from the audience to receive them. However, in other categories, all the nominees were brought on stage first, looking as uncomfortable as schoolchildren singled out in class for bad behaviour, and they stood there until the winner was announced and the camera promptly ignored the other nominees.

The most ill-advised decision of all was to have award presenters standing among the audience next to the seated nominees in some categories, and to have the winners giving their speeches before a microphone in the aisle.

Another reason the show was so lacklustre was that the comedian Chris Rock, master of ceremonies for the evening, failed to impose his own personality on the proceedings in the distinctive style of Billy Crystal, Steve Martin and the late Johnny Carson in previous years.

The choice of Rock as presenter had triggered alarm bells at ABC, the US network that televises the show, and a bleep machine was installed to eliminate any expletives he might utter. At the top of the show, after a few mild digs at Tobey Maguire, Colin Farrell and Jude Law, Rock took a few swipes at President George Bush for the war in Iraq, the death toll there, and the state of the US economy. Within half an hour, Rock was introducing the famously left-wing actor, Tim Robbins, with the words, "When our next presenter is not dazzling us with his acting ability, he's boring us to death with his politics." Later, Rock was reduced to participating with Adam Sandler in a hopelessly unfunny routine in which Rock pretended to be Catherine Zeta-Jones.

What compensated for the general dullness of this year's Oscars ceremony was the sense that, for a refreshing change, justice prevailed in the awards, with best foreign language film going to Alejandro Amenabar's superb Spanish drama, The Sea Inside; best animated film and best sound editing to The Incredibles; best original screenplay to Charlie Kaufmann's truly original scenario for Eternal Sunshine of the Spotless Mind; best adapted screenplay to Alexander Payne and Jim Taylor for the delightful Sideways; best original score to Polish composer Jan Kaczmarek for Finding Neverland; and best song to the only bearable nominee in its category, Al Otro Lado del Rio (from The Motorcycle Diaries), composed by Jorge Drexler, who sang a verse from it as his acceptance speech.

Unfortunately, there was no recognition for Irish director Terry George's urgent political drama, Hotel Rwanda, which had three nominations, nor for Gary McKendry's short film, Everything in This Country Must, based on a Colum McCann short story and set in 1980s Northern Ireland.

British director Andrea Arnold, whose Wasp won the award for best live action short film, accepted by declaring: "What can I say, but this is the dog's bollocks." George and McKendry may well be back in the Oscars arena soon, as, no doubt, will be Martin Scorsese, who was shamefully shut out in the past for Taxi Driver, Raging Bull and GoodFellas, but frankly did not deserve to win for The Aviator. At 62, Scorsese can only console himself with the fact that he is a year younger than Eastwood was when he won his first Oscars for Unforgiven. And being the insightful and appreciative cineaste that he is, Scorsese should be able to acknowledge that this year's Oscars night deservedly belonged to Eastwood. It did.