I loved Blood of Elves. That said, both it and The Last Wish seem to take an approach where the most important events all happen between stories, which is an interesting device, but not what most readers are used to.
I really enjoyed The Last Wish and would love to read The Sword of Destiny, but I'm particularly upset that the UK version of the next novel, Times of Contempt, has apparently been pushed back to 2012, and there is not date for the US yet. I am contemplating reading it in Spanish just so I don't have to wait so long.
If nothing else, it becomes much easier to understand Triss after reading the Blood of Elves. It also introduces Shani and several characters who play a role in the second game.