NOTE: Apparently, the "2000 Edition" of The Tolkien Companion is actually a reprint of the original edition, which was written before The Silmarillion was published. Because of this, its errors are truly enormous, and it honestly should be avoided completely. The New Tolkien Companion, which has been out of print for years, apparently fixes many of those errors.
The most current version is The Complete Tolkien Companion, published in 2004 (well after this little essay was written). I have only been able to skim through this version briefly, but it seems much improved and up to date. It still makes some odd claims here and there, but most of the major errors appear to have been fixed. Nevertheless, I would still be hesitant to recommend the book.
The Tolkien Companion, by J.E.A. Tyler, is a sort of encyclopedia of Middle-earth lore. It is written to be enjoyable to read (a difficult task for an encyclopedia!), but in many cases that seems to have taken precedence over accuracy. Thus, the book is a very unreliable source of information about Middle-earth, in two ways. First, Tyler fails to make it clear which information in the book comes from Tolkien's writings and which is his own invention, and second, his research itself tends to be flawed.
To support these claims, I'll analyze the first three entries in the book. Amazon.com has a few pages of The Tolkien Companion scanned in as samples, which you can probably reach from this link:
http://www.amazon.com/gp/reader/0517146487/ref=sib_dp_bod_ex?ie=UTF8&p=S003#reader-link
(I haven't been able to find a way to make this
link shorter; if it doesn't work for you, just search for "The Tolkien
Companion" on Amazon.com and look through the snapshots provided.)
The discussion below comes from the sample page at this link and the
one that follows.
First entry: "Accursed Years". This entry is generally okay, but even
so it has some odd features. I don't know why Tyler calles Sauron
"Sauron the Great"; are there other important people named "Sauron" in
Middle-earth we need to distinguish him from? Tolkien did use that
title for Sauron, but he certainly didn't use it often. The second
paragraph contains what seems to be an extrapolation from the texts:
Tyler says that the Elves who forged the Rings were of "Celebrimbor's
House". I don't know exactly what he means by this, but it's not a
term that Tolkien ever used of the smiths of Eregion as far as I
recall (UT says they were called the "Gwaith-i-Mirdain"). Still, this
entry isn't too bad.
Second entry: "Adamant". Tyler defines this as "A poetic invention
for an imagined hard substance." The Oxford English Dictionary
generally agrees, but points out that after the 17th century the word
was treated as a synonym for "diamond" (which seems consistent with
the appearance of Galadriel's Ring, a fact which might be worth
mentioning), and that in modern use it's only a "poetical name for the
embodiment of surpassing hardness". It's odd that after a long
digression on the making of the Rings in the entry for "Accursed
Years", Tyler doesn't manage to name any place in Tolkien's writings
where the word "Adamant" is to be found.
Third entry (including "translation" and etymology): "Adan, Edain 'Father-of-Man' (Sind. from Q. Atan, Atani)". We haven't even gotten to the main entry yet, and Tyler has made a serious error. If Tyler thinks "Adan" means "Father-of-Man", one might wonder what he thinks the word for just "Man" is (hint: the right answer is "Adan"). "Edain" literally means the same thing as Quenya "Atani": "the Second People" (according to the Silmarillion index). In fact, The Silmarillion actually includes a quote by Fingon before the Nirnaeth Arnoediad which includes the (Quenya) word "Atanatari", translated "Fathers of Men".
[EDIT: Apparently, this "translation" of Edain is in fact based on a quote from Appendix F of LotR. It isn't entirely clear that the quote was intended as a translation, and it certainly does not include Tyler's characteristic hyphens in "Father-of-Man", but it appears that this error was probably not his fault.]
On to Tyler's actual entry for "Adan". The second paragraph says that the Three Houses of the Edain were "led during the wars by Hurin, Turin and Hador the Goldenhaired." It's not clear why he doesn't mention Huor next to Hurin, or Beor, or Haleth, or Galdor, nor why Turin is on this list despite never actually leading Men in any major battles. He explains that Beren was of the First House, which is fine, but he doesn't ever mention that it was called the House of Beor.
Tyler's statement that "the Second House (of Turin) had much to do with Dwarves" seems entirely wrong: Turin was descended from all three Houses, but he was the direct heir of Hador, not of Haleth. Despite ending his life (incognito) with unofficial control of the remnant of the Haladin of Brethil, it seems misleading to list him as the leader of that whole people (and it is ridiculous not to even mention the terms "Haleth" or "Haladin"). Finally, to the best of my knowledge, no House of the Edain was particularly associated with Dwarves (and certainly not the People of Haleth, who kept to themselves); the only explanation I can think of for Tyler's statement is Turin's encounter with Mim while leading his band of outlaws.
After his questionable attempt to describe the Three Houses, Tyler
goes on to tell of the founding of Numenor. He says that the island
was originally called Elenna, though that is a relatively obscure name
given by the Edain themselves as they sailed toward Earendil's star.
The first name mentioned in The
Silmarillion was that initially given by the Valar: "Andor, the
Land of Gift." In the last paragraph of the entry, he refers to "the
immortality [the Edain] always desired", although the Edain didn't
seem to seriously "fall" in that way until well after arriving in
Numenor. His final comment that after returning to Middle-earth under
Elendil, the Dunedain were a "dwindling people" was true at the time
of LotR, but certainly not true for their full history: Gondor
prospered and almost grew to rival the memory of Numenor at its
peak.
I'll stop with that: it's too frustrating to continue. Of the first three entries in The Tolkien Companion, one is okay (if a bit odd), one seems incomplete, and one (the most detailed) is completely full of errors. As far as I've seen, this is typical of the entire book. Tyler's book might be entertaining to read, but as a source for actual information about Tolkien's Middle-earth it is quite poor.