ddickinson: Tolkien's translation of Beowulf is wonderful, one of the best I have read. You can really see his passion with the language. In regards to him using ideas from old myths and legends, that was always his intent, he never really tried to cover that up. He wanted to share those parts of history that he loved with his readers. I guess he was an academic at heart, and even in his books he was trying to teach people about the old myths, legends, and history that he himself was so passionate about and spend much of his life teaching about.
Yes, I've heard some things about his translation. I may get around to that some day. My professors are a bit divided on Tolkien translations: some like them, others don't. :) I'm currently reading* Beowulf in the original Old English for a course.
*Read: doing painstaking and terribly slow work on my own sucky translation. :P
Yes, his essay "Beowulf: The Monsters and the Critics" completely changed the field of Beowulf criticism, so it's extremely valuable. I do believe he was indeed extremely passionate about the subject, that much is clear from the loving detail in his works. :)