Absolutely love this. A proper musical, with a proper overture, and even an interval. I can only think this was as an attempt to make a night at the cinema as like a night at the theatre as possible. Oliver! has the same set up - and is also a great musical. They've both been on my by box for over a year, as even just having the songs on in the background makes the day better. Tradition!
It was the first time that I'd seen it. The three hours just flew in. Like you say the music is good and it has made me want to check out some authentic Klezmer music.
The only other film that I can think of with an intermission is Tora Tora Tora. It works well there, kinda builds up the tension before Pearl Harbour is attacked.