Saving Thao like that (although Walt's only intention was to get "those gooks" off of his lawn) opens up a relationship with Thao's family. Thao's sister Sue (the beautiful Ahney Her, also a first time actor) takes it upon herself to connect with the old man, educating him on her culture and people. Walt finds out that like many of the Asian immigrants in the area, they're Hmong, a "hill people" from Southeast Asia who fought on the American side during the Vietnam War before mostly immigrating to the U.S. Walt, after grudingly attending a cookout next door (and only because he was out of beer and Sue told him he could drink theirs), is flattered when the Hmong women insistently shower him with their delicious food. Sue also takes him down to the basement where the kids are hanging out, including Thao. Walt tries to give Thao advice on a cute girl at the party, well, his version of advice anyway, which includes calling Thao a "big fat pussy" for not talking to the girl who obviously likes him. After Thao's mom finds out that he tried to steal the Gran Torino, she sends him over to work off the debt to Walt, who reluctantly agrees. This starts a friendship between the two, with Walt having a kid who listens to him and eventually cares about him, while Thao finally gets some semblance of the father figure he's missing at home.
Eastwood the director handles all of these developments with remarkable ease. He also handles the changes in tone in tremendous fashion, as Gran Torino actually has a surprising amount of comedy in it, especially in the scene with Walt's barber as they try to teach Thao to talk like a man, and in the subsequent scene at a construction site. Still, Eastwood never lets us down, powerfully strengthening the dramatic tension in the final act. The performances he gets from his first time actors are very effective, although not completely free of the expected pitfalls of first time actors (occasionally awkward line readings and such). Although there's nothing really new in the story, it never drags and feels shorter than its 2 hour running time might suggest. I hope we get to see more of Ahney Her in the future, she's beautiful, has a good presence onscreen, and I think she could be a star in the right roles. Eastwood the actor has probably never been better. He's terrific as the initial racist Walt (a little over-the-top at times, but never unbelievable), and wonderfully shows us Walt opening up and changing, even if it's only a little bit. We start to see real affection in his eyes and voice as he connects with these two kids. Eastwood is also quietly devastating in his emotional scenes, and makes a strong case for the first acting Oscar of his career.
Gran Torino isn't the best movie of Eastwood's career, that's still Unforgiven by a wide margin, but I think it's probably his best since then, and definitely one of my favorite movies of last year. Although it didn't open across the country until this year, it technically came out in '08 in limited release so as to be eligible for this years Oscars, so that's why I consider it an '08 movie.