Falls just short of greatness.
The game takes place in a world of islands that float in the sky, traveled between by airships, a concept that was done a few years later in Baten Kaitos to (in my opinion) much lesser effect. Where there are ships, there are pirates, and Arcadia has two kinds: blue, who steal from the rich for the fun of it and give it to the needy almost as an afterthought, and black, who steal from whomever they please, and by any means necessary. As the game opens, Vyse and Aika, blue pirates, are adventuring when they come across a girl being pursued by a ship in the fleet of the tyrannical Valuan empire. They rescue her from the clutches of the empress who, without giving too much away, turns out to be the least of their worries by game's end. Many staples of the RPG genre, which I've only recently become enamored by, make an appearance: the boy adventurer who comes of age in the process of fighting tyranny, his plucky female companion, a mysterious girl whose destiny holds the fate of the world in the balance, an evil, power-mad villain bent on the destruction of everything, and so on. But if much of its story seems familiar, it is in other areas mercifully free of the biggest RPG cliches; no elves, dwarves, wizards, witches or mana here. I've heard that its creators were behind Phantasy Stars 1, 2, and 4, and SoAL achieves the good mix of ancient world fantasy and futuristic sci-fi that those games had. It also manages to appropriate elements from a breadth of other stories, including Robin Hood, Moby Dick, the Bible, Star Wars (one enemy is a dead ringer for the Death Star) and, naturally, Treasure Island, all the while managing not to feel derivative. Overall, the story is engaging, often emotional, and keeps you involved, no small feat with such familiar material. At the end, I had the giddy satisfaction that I was left with after the best Disney movies as a child, and the same sadness to see it come to an end. It's one of the few RPGs I've played (again, I haven't played nearly as many as some people) that actually made you feel like you were on an adventure, and that had a party which truly felt like a group of friends and allies, not just a collection of random characters traveling together.
Though the game is a very traditional, turn-based JRPG, it offers enough variety in the gameplay to keep from getting repetitive. There are the genre staples of traveling around from town to town (or island to island), talking to NPCs, random encounters, leveling up, collecting money, buying stronger weapons and armor, etc. But the ship travel, with its ability to move up and down in the air, and the ship-to-ship combat, a mix of turn-based RPG and Battleship, add a lot, as do the light puzzle solving, super moves and random counterattacks in combat, ability to choose your weapon's "color" and thus the magic element which will level up, eventual search for crew members, and minor side missions, which consist mostly of discovering things or hunting down wanted pirates and getting paid for it. It also strikes a nice balance between showing you where to go next and letting you discover it for yourself. You won't wander around for stretches of time, wondering where to go next, but it won't pick you up and drop you off at the next stop either.
With all the charm and beauty of the game (and there is much of both), it would be tempting to say it's as good as RPGs get. Alas, while that is true in some respects, it's not without its flaws. Everyone seems to point out the overabundance of random battles, which was my biggest gripe as well. It isn't too much of a distraction most of the time, but when you just want to explore, it can get frustrating to stop every few seconds. The game is also on the easy side, probably because all the random encounters let you level up fairly quickly.
But notwithstanding these rather small quibbles, the same is a joy to play. Every Gamecube and Wii owner owes it to themself to pick it up on eBay or Amazon.