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New Delhi: The awards in the key categories started with actress Helen Mirren getting the best actress award for her role in the film The Queen while Forest Whitaker won the best actor for The Last King of Scotland.
Ending one of the longest losing streaks at the world's top film awards, veteran director Martin Scorsese won his first Oscar in his 40-year-old career for crime thriller The Departed.
corsese had been nominated five other times for directing classics like Raging Bull and Goodfellas.
Meanwhile, Canada's official entry in the best foreign film category, Water, lost out to Germany's The Lives of Others at the 79th Academy Awards in Los Angeles on Monday.
Former American Idol contestant Jennifer Hudson won the Oscar for best supporting actress for her performance as the spurned lead singer of a female trio in Dreamgirls.
Hudson's show-stopping singing and sympathetic character had made her the odds-on favorite to win the award. It was the 25-year-old's first movie role for which she also picked up Golden Globe and Screen Actors Guild awards.
An Inconvenient Truth, the big-screen adaptation of former US Vice-President Al Gore's slide-show lecture about the perils of global warming, won the Academy Award for best documentary feature.
The award went to director Davis Guggenheim and producers Lawrence Bender (of Pulp Fiction fame) and Laurie David, the environmentalist wife of Seinfeld co-creator Larry David.
The savage fairy tale Pan's Labyrinth set the ball rolling with the first three Academy Awards for art direction, make-up and cinematography, kicking off an Oscar evening stuffed with contenders from around the globe.
"To Guillermo del Toro for guiding us through this labyrinth," said art director Eugenio Caballero, lauding the writer-director of Pan's Labyrinth, the tale of a girl who concocts an elaborate fantasy world to escape her harsh reality in 1940s Fascist Spain.
In a surprise victory, veteran actor Alan Arkin, who plays an irascible grandfather in Little Miss Sunshine, won the best supporting actor Oscar.
"More than anything, I am deeply moved by the open-hearted appreciation our little movie has received," Arkin said, after joking that he almost didn't get the job because the directors thought him too virile.
Canada also had a early win with Montreal animator Torill Kove picking up the Oscar for best animated short film for The Danish Poet.
The 79th annual Oscars feature their most ethnically varied lineup ever, with stars and stories that reflect the growing multiculturalism taking root around the globe.
"What a wonderful night, such diversity in the room," said Ellen DeGeneres, serving as Oscar host for the first time, "in a year when there's been so many negative things said about people's race, religion and sexual orientation.
Of the 20 acting nominees, five were black, two were Hispanic and one was Asian, while only two Americans - Eastwood and Scorsese - were among the five best-director contenders.
Indian producer Ravi Malhotra’s West Bank Story won the Academy Award in the Best Short Film Live Action category.
In a segment produced by Oscar-winning documentary filmmaker Errol Morris, the show opened with humorous pre-taped moments with nominees, including Clint Eastwood, whose Letters From Iwo Jima had nominations including best picture and director, and Peter O'Toole, nominated as best actor for Venus.
O'Toole, who lost on all seven of his previous nominations, was asked why he did not win for his first nomination as star of the historical epic Lawrence of Arabia.
"Somebody else did," O'Toole wisecracked.
Grey clouds floated over the red carpet as limousines delivered guests to the Kodak Theatre, but the hint of rain didn't diminish the enthusiasm of spectators as the likes of Maggie Gyllenhaal, James McAvoy, Al and Tipper Gore and Melissa Etheridge passed by.
"I don't think there's any pageant in the world that matches the Oscars," said Gore, whose An Inconvenient Truth was nominated for best documentary feature and best original song, I Need to Wake Up, by Etheridge.
"Every star under the sun is here. It don't get no bigger than this," said nominee Jennifer Hudson.
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