It has a very skewed understanding of temptation. The way this movie was described to me was that it wasn't merely a temptation, but an actual mindful sinning, or sinning in the mind, which is why it's so controversial.
We don't deny Christ was tempted, but the movie does not know what temptation is.
It can certainly be viewed that way, but if I remember correctly (I saw this film once about ten years ago), one can also take from it a "what if?" scenario that does not necessarily involve Jesus committing "mindful sinning". The key moment occurs on the Cross when the Devil, in the form of an angelic looking child, basically plays the role of the Jews and the bad thief and takes their question of, "If You're the Messiah, why don't you save yourself?" to its extreme conclusion. That moment is, in my mind, the Temptation of the title. What transpires next is a "What if...?" scenario for the viewer based on that temptation, something that not necessarily happens in Christ's own mind. It's almost like something the Devil shows Jesus, only the Devil's own fantasy goes awry because of the very Person he is trying to fool; Christ came to save us from our sins by His Death and even the Devil cannot warp that reality.
I think the important point that many religious critics miss is that at the end of the movie Christ chooses death on the Cross willingly.
I wouldn't go so far to say that everyone needs to see this film, but it certainly can be viewed in a more orthodox light than many people are willing to give it credit for.