Oliver Stone is without question one of American cinema's most compelling figures. A Vietnam vet who admits to spending a few years in a drug haze, he has a catalogue of internationally acclaimed features to his name, but remains a filmmaker who seriously divides opinion. Critic Pauline Kael famously stated that one of the advantages of retirement was that she would never have to watch another Oliver Stone film, and Stone's repeated tinkering with historical fact has earned him many detractors. But for just as many he is a director of fierce talent and conviction, as well as that rarest of beasts these days – a politically committed filmmaker working within the Hollywood mainstream. Stone's technical skills have been repeatedly demonstrated – the extraordinary editing in JFK and the eye-popping experimentation in Natural Born Killers are just two examples – but the sheer passion he brings to his work is what really marks them out, and nowhere is this more evident than in his blistering third film, Salvador.

Based on a true story, Salvador opens on down-on-his-luck journalist Richard Boyle at somewhere close to rock bottom. He is broke, facing eviction from his run-down apartment and about to lose his angry, at-her-wits-end Italian wife and young child. Boyle needs a job badly, but his hot-headed attitude and twitchy unreliability has rendered him almost unemployable. Believing there may be a story down in politically unstable El Salvador, he tricks his pill-popping friend Dr. Rock into accompanying him on what he sees as a fun trip, a combination of work and pleasure in a country in which he has political enemies, but also powerful friends and a girlfriend and child he has not seen for some time. But El Salvador is a dangerous, unpredictable place, and Boyle quickly discovers that he is unable to maintain his cheerful cynicism and stay detached from the social upheaval he initially went there to record.

Stone wastes no time setting up his characters, transporting them to the key location and outlining the seriousness of their predicament. In the space of just fifteen minutes, he introduces us to Boyle and Dr. Rock, establishes the full extent of Boyle's financial, relationship and work-related problems, separates him from his wife, gives us a detailed breakdown of his personality traits and his relationship with Rock, and has both of them in El Salvador in the belly of an armoured vehicle convinced that they are about to be killed by the local militia. It's a breathless, brilliant opening that encompasses drama, comedy, politics and nail-biting tension – despite occuring too early in the film to present a logical threat to the lead characters, their genuine belief that they are about to die is vividly communicated. At the same time it provides a wealth of character detail about Dr. Rock and (especially) Boyle, both of whom I, for one, instantly warmed to. They are outsiders, borderline crazy adventurers representing that side of ourselves we tend to keep in check but secretly dream of letting loose. It's this very element that alienated some critics who presumably prefer their heroes to be more traditional and clean cut – Leonard Maltin memorably complained that the film took it's time to engage him because "the two lead characters are such incredible sleazeballs." Which is exactly their appeal to clean-cut hero haters like myself.

All action is centred around Boyle (the screenplay is based on his autobiography), electrifyingly played by James Woods, who was was up for an Oscar and should have won it, but lost out to sentimentality – Paul Newman was damned good in The Color of Money, but come on! Woods plays Boyle with an extraordinary, high octane energy that ensures that even if you don't initially warm to him, he's never less than compelling. A self-destructive, self-centred man, his later conversion to humanitarianism come across as completely genuine and never for a second strains credibility. There is a burning rage, a devastating honesty to Woods' portrayal of Boyle that for me makes it not only the finest performance of his career, but one of the most compelling in modern American cinema.

But he is never isolated here: in his first major dramatic role James Belushi has never been better, with his memorable comic moments – the sequence in which he spikes a pompous TV journalist's drink with acid is an absolute hoot – matched by scenes in which he really shows his acting metal. One of my favourites has Boyle returning to town quarter in which they have become residents to general uproar and the tortured and murdered body of a young man whose life he tried desperately to save. Dr. Rock is standing with others, even more drunk than usual, and woefully points to where the body lays, blurts out with an extraordinary combination of anger and anguish, "He's fucked up! Over there, man – he's really fucked up bad!" It's an almost throwaway moment, done in long shot, but there's something painfully real about Belushi's delivery and the non-specific nature of the line. The supporting cast are also fine, notably the too rarely seen John Savage as committed Newsweek photographer John Cassady and Michael Murphy as Ambassador Thomas Kelly, and even small roles are cast with care and authenticity.

Stone is dealing with real events and clearly is doing so through Western eyes rather than those whose lives were directly affected by them. The political upheaval of an entire country inevitably becomes a backdrop for the story of the political and emotional awakening of an outsider, and the story is almost always seen from his perspective. Stone's legendary tinkering with pure fact aside, this leaves the film open to the charge of presenting Central American political events from an North American viewpoint, which itself should set alarm bells ringing. It's to Stone's credit that key historical incidents – the assassination of Archbishop Romero, the uncovering of the bodies of the murdered nuns – are handled realistically and with respect, even if the events leading up to them are partially fictionalised in order to personalise them within the narrative. Stone also kicks against present US mainstream expectations by siding with the rebels – the ruling, US-backed right wing government is portrayed as corrupt, immoral and murderous.

The approach is honourable and persuasive, but occasionally Stone comes in danger of overplaying his hand. The true-life rape murder of a group of American nuns does indeed horrify, as it should, and the yobbish aggressors may indeed be realistic, but the low angle shot of one of them leering and slobbering over his victim pushes the characters unnecessarily towards caricature – it's as if Stone does not trust us to be appalled by the mere concept of this assault and feels the need to point out to even the slowest audience member that these are BAD GUYS. The same is true of the sequence in which Major Max selects a loyal member of his staff to assassinate Archbishop Romero, an overly 'performed' scene that strays as far from the naturalism of Woods and Belushi as the film gets.

But these are small moments in an otherwise thunderously effective, immaculately crafted narrative. The film repeatedly plays with our emotions to extraordinary effect, hitting hard when we least expect and genuinely frightening in places. It also carries a still potent political message about misplaced US support for fascistic Central American governments in a way that never feels like a diatribe, partly because it arises from the character and situation and is delivered with such passion and conviction. This is particularly evident in the scene where Boyle repeatedly berates the American military representative Colonel Bentley Hyde for his simplistic judgements, ending with this assessment of his own position: "Left wing? Maybe. But I am NOT a Communist. And that's the trouble with you people, you've never been able to tell the difference!"

Salvador was the first Oliver Stone film I saw (I caught it in London just a week before Platoon opened and changed Stone's career forever) and remains my favourite, despite some stiff competition. It stands today, along with Roger Spottiswoode's Under Fire, as one of the very finest slices of 80's US mainstream political cinema. Would that there was someone there doing such work today.

My memories of Salvador at the cinema were of an edgy, grainy, low-budget visual style that I was fully prepared to see reproduced on the DVD. I was thus doubly startled by just how GOOD this transfer looks, a view echoed by Stone on the commentary track. Real care has been taken here: the picture is sharp, blacks are solid and colour reproduction is bang-on. A fine job.

A mention should also go to the main menu, which is very nicely designed around 35mm film strips and featuring motion grabs from the film, which are treated with a film wear filter and played with in an eye-catching manner, accompanied by George Delarue's urgent opening theme music.

The sound is solid enough but not one to show off the sound system. Despite the new 5.1 track, the use of rear speakers is mainly limited to music, as so often with supposed remixes of older soundtracks. I should add that this in no way detracts from enjoyment of the film – the documentary-like style is well-matched by the mix, though a more dynamic mix during the action scenes would have added to the already compelling sense of being there.

Though not overloaded with special features, what are here, for the most part, really do shine.

First up is an audio commentary by director Stone. There are a few dead patches, but when he does talk he really delivers, giving some fine insight into the film's production, the real-life Richard Boyle on whom Woods' character is based, the facts behind many of the key scenes and his own, strongly held political beliefs. There is some lovely background on how the film was funded using methods that were not always above board, and some nice information about the casting of small roles: Stone's newly born son plays Boyle's child in the opening scene, the cop who arrests Boyle over his outstanding parking tickets by top female professional bodybuilder Sue Ann McKean, and small but memorable support roles by the film's stills photographer Gary Farr and first assistant director Ramón Menéndez. Stone is a very knowledgeable and intelligent speaker and a man of considerable passion and commitment, something that really comes through in this commentary,

The documentary, Into the Valley of Death, is an absolute treat and probably the best extra on the disk, as well as being one of the finest of it's sort I have yet seen. Running at 62 minutes and presented non-anamorphic 16:9, it charts the chance birth and troubled production of the film, and includes interviews with many of the key participants, including Stone, Woods, Richard Boyle and Robert E. White, the real-life US Ambassador to El Salvador of the time and the man Michael Murphy's character is based on. White in particular is invaluable at providing a lot of the factual and political background to the story. There is also some fascinating archive material, including powerful documentary footage of the El Salvador civil war, behind-the-scenes and deleted footage from movie, even the real-life Boyle auditioning to play himself in the film. The information delivered is consistently fascinating and drives the documentary forward at the same sort of pace as the film. Possibly the most remarkable aspect of these interviews is how brutally honest many of them are about the problems and personality clashes that more than once nearly brought the production to it's knees – says Stone at one point of his sometimes tempestuous relationship with star Woods: "There were times when I wanted to kill him, I mean kill him, really kill him. I never felt the urge to violence as I did in that movie since Vietnam." A terrific extra that alone almost justifies the disk's 'special edition' status.

The four deleted and extended scenes are interesting, with some giving extra bite to familiar sequences, particularly Boyle's confrontation with a journalist-hating worker in a hotel bar. Others, though, have clearly been dropped for good reason – Major Max's encounter with two painfully cartoon-like American image makers makes a worthwhile political point, but the characters are almost ridiculous parodies and the scene itself as implausible as it would have been out of place. All are 4:3 from what looks and sounds like a VHS linear source.

Finally we have what too often turns out to be huge let-down – the photo gallery. And it's a huge letdown, and for the same reasons as usual – if you're going to include publicity photos, then present them full-screen, not in a tiny little box in the middle. A completely disposable extra.

With US political cinema in the doldrums and shows like 24 and The Agency blindly glamorising the often shifty work of covert American intelligence agencies, Salvador's guts and energy are to be treasured. It's a great film, well presented on a worthy disk. The transfer is very impressive, the commentary, despite the dead spots, is invaluable for anyone interested in the director's work, and the documentary has way more bite than almost all others of its ilk. Highly recommended.