Personally I wouldn’t take a toddler to this intermittently, legitimately terrifying tale of a boy and his Loch Ness monster. But everyone else should blow off Alvin and the Chipmunks and show up for the best kiddie picture of the season and, along with Ratatouille, of the year. You can never go wrong adapting a story by Dick King-Smith, one of England’s finest writers for children. Drawing on just about every tough and tender rite-of-passage fairy tale worth its salt, The Water Horse is a graceful meeting of talents between screenwriter Robert Nelson Jacobs, the digital effects team that juggled cute and scary so deftly in The Chronicles of Narnia, and director Jay Russell, who already has the children’s classics My Dog Skip and Tuck Everlasting under his belt. Alex Etel, plays Angus, a Scottish boy who picks up a strange egg that soon hatches into a translucent little fellow with broadly the same narrative function as E.T., except that it quickly morphs into a huge beastie that’s happiest when underwater with a bereft lad on its back. Hovering in the background, gorgeously lit by Oliver Stapleton, are World War II, a personal tragedy, and a terrific ensemble that includes Emily Watson, plump and worried as Angus’s mother, and Ben Chaplin as a mysterious handyman waging class war on a snotty Home Guard commander.