I saw this movie recently, and it was really good. The movie mostly follows the story of Rocket (Buscape in Portuguese) who lives and grows up in a slum of Rio De Janeiro named "City of God" (Cidade de Deus).
Rocket dreams of being a photographer after some local thugs give him a gift of a camera. But first, he has to survive his childhood, which is no easy task since there isn't much economic opportunity in the slums except to become a gangster (rob utility trucks) or deal drugs.
The lives of several others are interwoven into the story. One of the most interesting and shocking is that of a friend Lil' Ze (nee Lil' Dice), who starts as the lookout for a trio of small hoods, and later becomes a murderous drug lord controlling various zones of the city.
Fernando Mierelles also directed The Constant Gardener, which I am now eager to see.