I only heard about Labyrinth last year. It seems like such a waste of childhood that I didn't know earlier. Otherwise I would have probably watched it a thousand times. It was so lovely! And… it even has -fake, real and animated- barn owls!
The story can be explained in one sentence: girl needs to babysit younger brother, wishes him away and then has to rescue him from the goblins by going through this labyrinth... So now we can watch a song instead of the trailer!
This is a collaboration between Brian Froud, Jim Henson and a huge crew. Fun fact: the baby is actually Brian Froud's son! The dvd also has an amazing documentary about how the movie was made. I loved seeing that!
Anyway, their earlier joint effort -the Dark Chrystal- was good as well, but this was faster paced and more exciting story-wise. I might have to re-watch the Dark Chrystal to be absolutely sure, but I think Labyrinth is my favorite.