I haven't seen the movie yet, but I've seen the Rathbone and Brett series, and read all the Doyle stories.
The Rathbone movies dumbed down the character of John Watson. The Brett series restored some of the original intent.
In the short stories, Dr. Watson is a war hero from Afghanistan. He's wounded in battle, recuperates in a British hospital, and then starts a medical practice in London when he meets Sherlock Holmes. Watson is introduced to Holmes via an acquaintance. They become roommates.
What is special of the Holmes series is the method of storytelling. All but four of the stories are written in the first-person of Dr. Watson. This makes the character of Holmes even more vivid as seen through Watson's eyes, but also makes Watson a strong character in his own right.
-PJ
WhenI first saw the old Basil Rathbone Holmes movies, I was angry the way they portrayed Watson as a buffoon, even though Nigel Bruce did very well with that characterization. The portayals of Watson by Burke and Hardwicke were much truer to the original stories. In fact, in the Brett series the dialogue was sometimes rearranged so as to give the Watson character a more substantial role, or at least more speaking parts, than he had in the original stories.