From a bucolic green and pleasant land via the belching chimney stacks of the Industrial Revolution to the internet age, Danny Boyle's attempt to define Britishness in the opening hour of his Olympic opening ceremony was a madcap, surreal, moving and often confounding affair.

An "industrial parade" of Jarrow marchers and colliery bands, hundreds of dancing nurses accompanied by Mike Oldfield, the Queen's encounter with James Bond as well as a nightmarish sequence of childhood terrors – they all featured.

When Dizzee Rascal, tiny among the armies of volunteer dancers around him, appeared to sing Bonkers at the climax of a third act that starts as a love story and becomes a riotous celebration of British music through the ages, it felt curiously appropriate.

It was typical that the arrival of the head of state, usually an overblown affair, is instead preceded by a film in which the Queen met Daniel Craig's James Bond at Buckingham Palace.

Although Boyle said that he consciously avoided trying to compete with the scale of Beijing, based on the dress rehearsals this week there were moments of jaw-dropping wit and invention.

But there was also an effort to tell a thousand small stories, amid a jumble of ideas that may or may not have translated to the expected international audience of up to 1 billion.

One of the show's recurring themes, juxtaposing Britain's past with its present, was set in the opening two-minute film directed by Boyle and made by the BBC.

It chased the Thames from its source in Gloucestershire to the heart of the stadium, to a soundtrack featuring Big Ben, the Sex Pistols, the EastEnders theme and the Clash's London Calling.

The green and pleasant land set, which had already been unveiled by Boyle, with real horses tilling real soil and gangs of country folk playing cricket and football amid water wheels and cottages billowing smoke was revealed during the "pre-show" that kicked off at 8.12pm, with Hugh Edwards presenting the BBC's coverage live from the lush meadows.

But after the giant bell at the end of the stadium was rung to begin the show, the pastoral atmosphere didn't last long.

The sheep and geese were herded off just before the show began to a chorus of national songs from England, Scotland, Wales and Ireland. And following a reprise of Jerusalem, Kenneth Branagh appeared as Isambard Kingdom Brunel to usher in the "dark satanic mills" flipside to the opening "green and pleasant" land.

Once Branagh delivered Caliban's speech from the Tempest – "Be not afear'd; the isle is full of noises" – all hell broke loose. At the opening of the second act, named Pandemonium after John Milton's invented word for hell in Paradise Lost, the oak tree on Glastonbury Tor rose from the ground and hundreds of people streamed out from beneath to start dismantling the green and pleasant land.

The "clouds" that were being pulled around the edge of the arena on lengths of string are packed up and put away.

Amid sparks and smoke, seven huge industrial chimneys rise from the ground.

Meanwhile, around the edge of the stadium on the circuit dubbed "the M25" by Boyle an "industrial parade" of Britishness past and present marched by. This is where the Jarrow marchers and colliery bands make an appearance, accompanied by marching Chelsea Pensioners, Sergeant Pepper-era Beatles pulling inflatable yellow submarines, pearly kings and queens, and hollering newspaper vendors.

At the end of the act, five flaming Olympic rings floated into view, sparks falling from the sky against the night – providing the first big photo opportunity.

After the arrival of the Queen, it was time for the next act – Second on the Right and Straight on Until Morning.

Boyle's homage to the NHS featured hundreds of real nurses who volunteered to be part of the 10,000 strong cast, including staff and patients from Great Ormond Street Hospital, with its links to JM Barrie, and the Harry Potter author JK Rowling reading from Peter Pan.

Following a song and dance routine with nods to Benny Hill and Carry On, the kids are tucked up in bed and a nightmarish dream sequence begins – featuring child catchers, the Queen of Hearts and witches.

Here, the pixellated paddles on every seat that had been used up to now to effectively turn the entire arena into a big screen came into their own as sinister blinking eyes.

Then the nurses collectively delivered a giant baby, the London Symphony Orchestra played Chariots of Fire in tribute to the British film industry and Michael Fish ushered in the next act. It was that sort of show. Who knows what they will make of it in Beijing.

The final act – Frankie and June say Thanks Tim – was more straightforward. A love story set in a suburban house that pays tribute to the British inventor of the world wide web, Tim Berners-Lee, to a soundtrack of big British music, TV and film moments.

From Gregory's Girl to Four Weddings, the Beatles to the Stones, the Jam to the Who, Monty Python to Harry Enfield and Amy Winehouse to Tinie Tempah it was a condensed greatest hits of British popular culture.

Inevitably, Born Slippy also features – a nod from Underworld, who composed the score, to Boyle, who featured it on his Trainspotting soundtrack.

The lights on the seats turned into graphic equalisers and spell the message: "This Is For Everybody!"

Although the ceremony cost £27m, large parts of that clearly went on the technology, the flying rigs and the pyrotechnics.

Plenty of audience interaction was encouraged, perhaps in hope more than expectation given that only half the tickets available were on general sale.

Stewards known as "mechanicals" encouraged the crowd to hold their pixellated paddles aloft, to stand in the appropriate places and pass large silks of blue cloth down from the top of the stands.

Two hundred lucky ticketholders became part of the action, watching from a "mosh pit" and a "posh pit" at either end of the arena and waving banners and flags in an echo of Glastonbury.

Boyle, who said on Friday morning that he wanted the audience to be moved as well as impressed, also built in moments of genuine reflection to the hour-long show that preceded the parade of athletes from the 204 competing nations.

In one brief sequence during the Pandemonium section, first world war-style soldiers removed their hats and the only sound was a lone whistler. The crowd were motioned to stand to remember the dead "wherever they are".

At the end, as if to bring the audience down before the athletes parade, there was a moment of silence for "friends and family who can't be here tonight" and an Akram Khan dance piece to Abide With Me by Emeli Sandé.

And then, after all of that, the part of the evening that Boyle insisted was the main event – the athletes' parade and the protocol of the anthems and speeches – began. And there was still Paul McCartney to come.