Yep, I own bootlegs of both movies (they were gifts, really) and they really do say wacky sh** like this. The Fellowship we own seems to have been translated by someone who spoke some English, but couldn't make out all the words. Hence, Gandalf saying "Frodo, you fool!" instead of "Fly you fools!"
The TT seems to have been translated into some other language before being subtitled back in to English. Its mistakes are less funny and more just plain bizzare.
Oh it's real alright, I think the "engrish" LoTR thing came up last spring, it's pretty common in foreign movies (bootleg and official). Check out Engrish.com for more translating hyjinks. http://www.engrish.com/