I watched the shorter, international version of Arn and thought it was quite good. That version is about 2 hours long, and the original, uncut version is more like 4.
I have since ordered (but not yet watched) the longer version, which you can get on Bluray here:
http://amzn.com/B007K7IB84I pretty much agree with a lot of what you guys mentioned about Kingdom of Heaven. My biggest gripe is the portrayal of the Templars as well. The director's cut improves the film overall, filling in a few gaps, but the Templar portrayal is pretty much the same.
In addition to being an easy target, I think it's become a bit of a cultural norm in modern story telling to make the large establishments out to be the bad guys automatically. The Templars were widely known, wealthy, and had enormous influence. That practically makes them Darth Vader and the Stormtroopers by today's movie standards.