Fantasy film, released in 1940. Directed by Ludwig Berger, Alexander Korda, Zoltan Korda, William Cameron Menzies, Michael Powell, and Tim Whelan. Yes, it really had that many directors, partly because producer Alexander Korda was trying to play different directors against each other, and partly because they had to stop filming during World War II and finish up afterwards. Starred Sabu as the cunning thief Abu, Conrad Veidt as the evil sorceror Jaffar, and Rex Ingram as the gigantic djinn.
The plot is lightweight but sturdy enough: Jaffar covets the kingdom and the beautiful princess, so he kills the sultan and runs off the handsome prince, who goes into hiding and teams up with Abu to save the day and make everything right. Along the way, they run into a flying carpet, a clockwork flying horse, and a powerful djinn who reluctantly grants Abu three wishes, grumbling, "To hear is to obey, little master of the universe." The special effects were stunning when the film was released, and they still hold up pretty well today. It's a beautiful movie -- gorgeous photography, damn good acting (especially from the previously-unknown Sabu), exciting effects, magic and fantasy and adventure dripping off the screen.
If you can find this movie, rent it, buy it, or steal it -- watching it is worth the money/jail time.
Some research from the Internet Movie Database (www.imdb.com)