I didn't like Bilbo. He seemed like the typical overfed, stuck-up, upper-middle class idiot who thinks nothing bad is ever going to happen to him. Gandalf saw this, too, in the Hobbit, and thought he needed an adventure. I thought so, too.
He proves himself to be a good friend after helping those fat, corpulent dwarves through their adventure. The dwarves mostly wanted the gold. It was the people of Dale that wanted the dragon dead after killing so many people, and Bard got his wish. How did that happen? All because of Bilbo Baggins, that stupid fat hobbit! Why?
Only Bilbo, a stupid fat hobbit, didn't know enough about dragons to be scared of walking up to one as it slept. He stole a prized cup of his, then ventured back for more. When Bilbo chatted with Smaug, who was awake, he noticed Smaug's lack of concern with the cup. Why was Smaug hiding in the mountain surrounded by treasure? Bilbo concluded that Smaug didn't want the cup, therefore, he wasn't in his hidey-hole to protect the treasure. He was terrorizing people while protecting his hide. He stole because he also liked shiny stuff, and it also seemed to discourage people from fighting back.
Bilbo told Smaug that the people didn't want gold; they thirsted for his live in revenge. Bilbo tricked Smaug into believing the dwarves wanted revenge after killing and terrorizing all those people. Terrified, Smaug left his hidey-hole to kill the dwarves on the side of the mountain and terrorize Dale. Bilbo and the dwarves used the side-door to get the treasure, and Bard got a clean shot at Smaug, once Bilbo told him about the weak spot on his diamond-encrusted chest.
Bilbo turned out to be a smart, sneaky trickster and a kind, loyal, generous old fellow willing to risk his life for his friends. He shared their love of riches as well as a human's (and Smaug's) using riches to hide (or deny) a fear of death. Bilbo turns out to be a true character, and I liked him in the end of the hobbit.
In the Lord of the Rings series, I liked him less. Once acquiring the Ring, he believed he was more powerful than anyone else. This was true in the Shire. He had to drop the Ring and go to Rivendell to be more humble. The idea of power (the Ring) nearly drove him to abandon all his trustworthiness and steal from his closest friend and heir, Frodo. Once he dropped the idea (or he realized he could never be as great as the ring promised), he became the fat, old loveable hobbit we know as Bilbo of the Shire.