To put it simply:
The Happening isn't the best of Shyamalan's films (I'm rather partial to Signs to be honest), but it's also not the worst film he's ever made. If you were to say it's the worst, that's not saying it's bad at all, only that it's not as good as his others (which I would probably agree with, but I refuse to say it's the worst of his films). I liked this better than I liked The Village, and since I haven't finished The Lady in the Water or seen Unbreakable I can't place it above or below those. It's not his best, but definitely better than the public is saying.
The fact is, people don't get Shyamalan. They go into his films expecting another Hollywood reboot of some idea, which they will almost always complain about anyway, only to be given something that requires you to either think or attempts to trick you into thinking something, only to turn the tides in the end.
Now to the breakdown:
This isn't Shyamalan's best film as far as direction is concerned. I think a lot of the problem is that his characters aren't entirely the focus here, as in films like Signs or Sixth Sense. The world at large, or at least the East Coast is the primary focus, so while the early parts of the film are absolutely superb (the way he drew together the carnage was amazing), his delivery later is missing something. I blame this on what I just mentioned: this isn't a character story like his other films (and maybe he wanted it to be a character story, but it just didn't work that way). He has his moments here, but it could have done better to bring more focus on the characters.
I'm not overly ecstatic about the cast. Wahlberg was either flat or over the top in places. His delivery was sometimes just too ridiculous (a little of that gosh-wow stuff). He had his moments though (there is a particularly great bit of dialogue revolving around a superfluous bottle of cough syrup, which is simply a classic). Unfortunately, his moments aren't enough. Deschanel was okay, although flat, which is sort of how she acts I think. She wasn't horrible as she was in the Wizard of Oz reboot, but she lacked a lot of depth. Again, a lot of the problems stem from this film not being a character film. The little girl, unfortunately, didn't have a lot of lines, but Leguizamo was absolutely awesome. I really wished his character had stuck around more. There are numerous other characters that add to the cast, most of which are really good choices for their parts and fit well into the story I think.
This wasn't adapted from anything as far as I know, so it doesn't apply.
A lot of people have reamed him on his story. Either they think the science is stupid or they have this strange idea that this is an Intelligent Design propaganda film. Let's face it, maybe Shyamalan wanted and ID movie, but what he gave us was a film that very clearly talks about science exactly in the same way that scientists would. The fact that they pass off the epidemic as an act of nature that won't be fully understood doesn't say that it's God (Shyamalan thinks it does, apparently). All it does is show us why we love science: there will always be other questions that need answering.
The story revolves around an epidemic in which some strange contagion turns off people's "survival reflex" and instead flips the switch so they actually would rather die. It's chilling and freaking creepy when we see people offing themselves for seemingly no reason. The reasons for the contagion are explained in the movie (contrary to what everyone seems to think), while still leaving a little room to wonder why. Yes, the story has some serious logic to it, based on what we know about certain parts of nature in the first place. The "infection" has a very interesting and probable base in a scientific reality (although, perhaps Shyamalan has pushed things to a higher state on purpose, because seeing this sort of thing happen at a snail's pace would be exceedingly boring).
Overall, the story works really well. The critics have blasted this film for reason that still don't make a lot of sense to me. In fact, the whole ID argument makes absolutely no sense since it is never really established that the main characters are wholly religious. They don't pray on screen, they don't run around screaming "oh Lord, save me" and they don't carry around Bibles. They're just normal folks. It's completely irrelevant that Wahlberg and Shyamalan are strong Christians, because the film itself doesn't give us a long babble about such things. It's a movie about a normal married couple trying to survive an epidemic and not knowing what the hell is going on. And it works.
The visuals are by far the best. The opening scenes are disturbing and sparing at the same time. There isn't a tremendous amount of blood and guts, which I think is fantastic because I'm tired of seeing nothing but blood and brain matter all over (if this had been done by someone other than Shyamalan, it might have been more gruesome). People offing themselves is simply terrifying (we get to see people nonchalantly jumping off the tops of buildings, stabbing themselves, etc.). The scenery is well chosen: lots of green (and that's an understatement). Visually, I was well cared for, and that's pretty much nothing but a big plus for me.
Is Shyamalan a genius? Yes. Is this an example of his genius? Sort of. Yes, it does pull at some of the familiar tropes found on his work. But it doesn't give the same comprehensive feel that his other movies do (take Signs, where everything is so perfectly foreshadowed that in the end the little character quirks fit together like pieces to a puzzle), but in a way I don't think it's necessary. This movie is not terrible. It's not great, but it's not the worst film of the year, or the worst film ever made. It gives us a chilling account of disaster. It's not a horror movie (if you expected this when you saw it, you probably should have paid more attention to what you were going to see).
The characters are generally likable, and Wahlberg does provide some comedic relief on screen, while being serious. The casting may not be perfect, but it doesn't ruin the movie. My advice is this: if you don't like M. Night Shyamalan in the first place, don't go see this movie. You can't expect Shyamalan to stop being Shyamalan. He's who he is and he will direct how he usually directs (and writes, for that matter). The film does what it's supposed to do: it entertains. See it to be entertained, not to avail said director of some public-imposed label of suckage. If you go into any movie with that attitude you'll most likely leave disappointed. See The Happening as just another movie.