"I like half of you half as well as I should like" means that he likes half of the person, but his like is only half as much as he wishes it could be. He wants to like this half of the person more. "and I like less then half as well as you deserve"? Means that as much as he likes this person, he dosn't like the person half as well as he deserves.

Suffice it to say, it's just a nice way to say he hates their guts.

He means he likes 1/2 of the people 1/2 as much as he should. = love meter is at 50%. And of that half of the people he has 50% love for, less than 1/2 of them deserve more. He likes only half of these people and of that half (say 25% of them) deserve more than he is capable of.

Here's the actual quote... "I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve." Simpler... I know less than 50% of you half as well as I would like to know you, and I like less than 50% of you half as well as you deserve to be liked. My opinion: Basically he's saying that of the group of hobbits at his party, half the crowd he would like to know better, and of the other half, there is a portion (probably most) that he dislikes, but he's telling them that they probably aren't deserving of him disliking them that much

MY guess: Bilbo was drinking mead, lots of mead; therefore, people say unclear things while intoxicated? ;) jk

He was just playing with their minds and getting them all confused :)

1) As Chezter already said, the real movie quote should be somewhat different. http://www.answerbag.com/a_view/5432950 I found a lot of references for your quote, but I could not find it in the movie script: http://www.google.com/search?hl=en&q="I+like+half+of+you+half+as+well+as+I+should+like"&start=10&sa=N The real quote is: "I don't know half of you half as well as I should like and I like less than half of you, half as well as you deserve." 2) Here the quote in context: "BILBO: Today is my One Hundred and Eleventh birthday! (the crowd cheer and raise their glasses) HOBBIT: Happy Birthday! BILBO: Alas, elevnty-one years is far too short a time to live among such excellent and admirable hobbits. (the hobbits cheer) I don't know half of you half as well as I should like and I like less than half of you, half as well as you deserve. (there is confused silence. Gandalf smirks)" Source and further information: "The Fellowship of the Ring Extended Edition Movie Script" - "Scene 5 ~ A Long-expected Party" http://www.ageofthering.com/atthemovies/scripts/fellowshipofthering5to8.php Other sources: http://www.council-of-elrond.com/fotr_transcript.html http://www.warofthering.net/quintessential/movieshots/fotr_b1c01_script456.htm 3) Meaning of the original quote: "I don't know half of you half as well as I should like and I like less than half of you, half as well as you deserve." Bilbo says first that he should like to know all of them very well (because they are worth it). However, he only knows less than half of them very well. (but that is because he did not have the time to know them all very well, probably) Bilbo says then that he should like all of them as well as they deserve. However, he only likes less than half of them; and even those, he likes them half as well as they deserve. (but that is because he does not know them all very well, otherwise he would probably like them all) The changed quote has a similar meaning, but it is a little more complicated because of the repetition of "like" in the first part.

He doesn't know most of the people as well as he wishes he did. There are also a few in the crowd who deserve to be liked much more than Bilbo actually likes them. Hope that helps.