there's magic (this particular family is very conservatively religious), there are mythical creatures
Er, helloooooooo!!! It's a fairytale!!! What did you expect?
Do those same people have the same problem with Lord of the Rings? It also has magic and mythical creatures and a lot of sanitised violence to boot.
there's torture (of the gingerbread man)
Now, come on! [Jeremy Paxman emoticon] This is a mite ludicrous. I think that kids these days know the difference between a gingerbread man and an animate being. As for animated violence I don't think that it has adverse effects on children. Plenty of people grew up with the likes of Tom and Jerry without acquiring violent tendencies.
As for me I loved Shrek so much I bought the DVD. Okay, it's not as funny as Toy Story 2 (The Star Wars revelation in that had me in tears) but Eddie Murphy and Mike Myers playing off each other were priceless. The Monsieur Hood scene was the best, though, but sadly too short and I'd have loved to see it last at least five minutes longer.
