I'm going to be honest guys, that movie was just wrong. The Joker was the most sadistic character I have ever seen in a movie. He makes Hannibal Lector look like a cute puppy. It really was quite disturbing. The movie was almost depressing. The best part to me was when the huge black prisoner threw the detonator out the window. "I'm gonna do what you should have one ten minutes ago".
I think he did an excellent job of playing a psycho. Probably the best I've ever seen on the big screen. Sadistic? Maybe. Moreso, insane with a facination with knives, explosives and setting things on fire. That people were killed I think is of a secondary concern. Entertainment (or rather, listening to the voices/impulses in his head) is his primary concern.
You gotta admit, the pencil magic trick was just downright funny.