The animation is workmanlike, which is to say that the characters and settings are nicely rendered but there are no steps forward in technique. Perhaps we have reached a state where the lush detail of computer generated images is no longer eye-popping; it has become expected. If that's the case, Kung Fu Panda delivers what's expected. There is one interesting twist: the movie opens with a dream sequence that is crudely presented using two-dimensional, exaggerated caricatures, so when the dream ends and we enter the "real" world, the contrast is stark.
In recent years, computer animation has been in the doldrums. While Kung Fu Panda isn't the movie to re-invigorate the genre, it's made with enough technical savvy and provides sufficient fun (especially for younger viewers) that it should be a major player at the summer box office.