Haven't seen flags yet. And the reason Marshall used Chinese actors was because they didn't think there were any Japanese actors with enough face recognition. Yes, Watanabe is somewhat known, but he's also barely in the movie.
And, I'm sorry, but I think it takes some artistic balls to make a movie in a language you don't speak. And I think those are precisely the artistic balls that Rob Marshall lacks (and if the studio insisted, he should have passed or at least insisted on Japanese actors). Why go with clipped British accents when you could go with clipped Chinese accents?
When you say stereotypical, do you mean stereotypical war movie or stereotyping of the Japanese? If the latter I found it more restrained than most and also pretty accurate in attitudes as I hear them second hand through Lani (who's father applied to be a kamikaze pilot). Say what you will, but the circumstances under which Saigo fled Suribachi is not something you'd see in an American war movie.
Haven't seen Flags yet so I have no problem with the thought that it is better than Letters (though you're the first person I know that has seen both that thinks so) and has been overlooked.
Personally, I'm still somewhat burned out on war movies and the reason I saw this one is because it is nominated for best picture (Babel is no longer playing anywhere near me) and because it was the only thing within 25 miles that I haven't seen and have any interest in (at the last minute I almost went to Ghost Rider instead).
I definitely would not put Letters in the top five for the year (The Queen was already on my list of the five that should be in line behind Children of Men and now Letters is back there as well.) Both Scorcese and Greengrass are more deserving for director (and I'm with you that Greengrass should have it, though I'm ok with Scorcese winning).
The screenwriting categories still continue to confuse me. Letters credits source material (the letters of General Kuribayashi (Ken Watanabe)) and is an original screenplay while Borat is mostly unscripted and is still an adapted screenplay. Anyway, Letters doesn't come out on top for this one, either as I'd give it to Pan's Labyrinth if I had my druthers.
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