It's still 'can do' at Cannes where there's plenty to bring good cheer despite the global downturn

FEWER billboards and people on the Croisette, and parties where you sometimes had to pay at the bar (if you could afford the prices), were some of the signs that the 62nd Cannes Film Festival has been taking place amid a global financial downturn – or le crise, as they call it in France.

However, the festival has by no means been a gloomy affair. On the contrary, the choice of Pixar's latest animated wonder, Up, as the opening film, guaranteed that the event began on an upbeat – if somewhat unstarry – note.

The good cheer continued when the front of the Carlton Hotel was turned into a winter wonderland, complete with fake snow and decorated Christmas trees, mid-way through the festival, for a screening of footage from Disney's forthcoming release, A Christmas Carol, starring Jim Carrey (who arrived in a horse-drawn carriage) and directed by Robert Zemeckis. Made using the same digital animation process Zemeckis employed on Polar Express and Beowulf, and presented in Disney Digital 3-D, the film looks wonderful and appears reasonably faithful to the Dickens original.

Carrey, who plays Scrooge and the ghosts of Christmas past, present and future, was also appearing opposite Ewan McGregor in the Directors' Fortnight film, I Love You Phillip Morris, whose frank approach to homosexuality couldn't be more different from the family-friendliness of the Disney picture.

In keeping with the cheery atmosphere, Ang Lee put 13 years of tragedies behind him and entered lighter territory with Taking Woodstock – a mellow comedy drama based on Elliot Tibor's memoir about his involvement in the creation of the legendary Woodstock rock festival. Almost perversely, the film never gets near the stage but remains on the periphery, the music a muffled blur in the background. Though it proved too slight for some critics, the film is a charming slice of nostalgia with a keen eye for period detail (the film-makers even made sure that the extras all had pubic hair), an inspirational storyline, and one of the gooviest acid trips ever filmed.

Surprisingly, the good vibes even continued with Ken Loach's well-received Looking for Eric, which saw the veteran film-maker tempering some of his trademark grit to turn in a feel-good film about an overwhelmed postman who turns his life around with help from his imaginary guru, Eric Cantona (played by the football legend himself)

Lars von Trier had no interest in making anyone comfortable. Indeed, the Danish provocateur seemed positively intent upon upsetting as many people as possible. Venturing into horror for the first time, his film Antichrist is a technically adroit but gruesome two-hander, in which a grieving couple, played by Willem Dafoe and Charlotte Gainsbourg, unwisely retreat to a cabin in the woods for a spot of therapy. What follows is the mother of all marital spats. Von Trier serves up graphic sex, a close-up of female genital mutilation and torture in a loopy, over-the-top misogynist fantasy that provoked sporadic laughter, a smattering of applause and a torrent of boos at the first critics screening.

Challenged to "explain and justify" the film's extreme content at a press conference the following day, Von Trier looked shaken, but declared: "I don't have to explain anything. You are all my guests here, not the other way round." He was, he added impishly, "the best film director in the world". The Dane wasn't the only film-maker painting the screen red: there were buckets of blood in Par Chan-Wook's sexy and stylish, if overlong, Korean vampire movie Thirst, while Brilliante Mendoza's unflinching depiction of the abduction, rape, torture and ultimate dismemberment of a prostitute in Kinatay left some wondering what on earth the selectors were thinking when they included it in the Competition.

On Wednesday, all eyes turned to Quentin Tarantino's Second World War revenge movie, Inglourious Basterds, the motor-mouthed director's third film in Competition, following 1994's Palme d'Or winner Pulp Fiction and Death Proof in 2007. Sadly, it wasn't the return to form some were hoping for.

The Tarantino groupies in the audience applauded as soon as the lights started to dim, and there was polite applause when they went up again; but while by no means as disappointing as Death Proof, the film is still a long way from the glory days of Reservoir Dogs, Pulp Fiction and Jackie Brown.

There is more talk than splatter, which is a pity since the dialogue, in the past the ace up Tarantino's sleeve, is sometimes dull and long-winded. Meanwhile, the film simply jumps from chapter to chapter with little sense of pace or fluidity, leaving most of the characters feeling underdeveloped, despite a running time of well over two hours. Ultimately, Inglourious Basterds is one for the fans. Although even they may be losing patience. The film looks unlikely to worry the Isabelle Huppert-led jury when considering who to award this year's Golden Palm. On the other hand, this is Cannes.

At the time of writing, the critics' favourites were Jacques Audiard's gruelling prison drama, The Prophet, and Bright Star, Jane Campion's film about the three-year romance between the poet John Keats (Ben Whishaw) and seamstress Fanny Brawne (Abbie Cornish), which some on the Croisette declared to be Campion's best film since her 1994 Oscar winner, The Piano.

Fish Tank, Andrea Arnold's follow-up to Red Road, was also being tipped as an early contender. The winner will be announced on Sunday.