All together now: "Jai Ho!"

"Slumdog Millionaire," the Mumbai fairy tale about unimaginable poverty, pride and enduring love, hit the Oscar jackpot last night and was named Best Picture of 2008.

It was the Cinderella story of the awards season: A movie that nearly went directly to DVD, cost a mere $15 million and blended Bollywood stars with a London teen actor, a stunning model and adorable children recruited in the Indian slums or from schools.

Not only were they brought to the big screen but they took their first plane rides and appeared on the red carpet outside Hollywood's Kodak Theatre as family and friends back home crowded around television sets in Mumbai to watch the broadcast.

Outside the shacks, people bathed, women collected trash and stray dogs fought. But inside, it was a joyous celebration of "Slumdog," which also took statuettes for director Danny Boyle, adapted screenplay, cinematography, film editing, score, song, and sound mixing.

"The Curious Case of Benjamin Button," which entered the night with a leading 13, ended up with just three wins.

Actors whose names were inside the sealed, foil-lined envelopes at the 81st Academy Awards: Sean Penn, Kate Winslet, Penelope Cruz and the late Heath Ledger.

Penn may be prickly with the press but he's a brilliant, uncompromising actor who earned his second Best Actor statuette for "Milk." His first was five years ago for "Mystic River."

Penn said he knows it's hard to appreciate him but he appreciated the award, after jokingly calling the audience "Commie, homo-loving sons of guns."

The 48-year-old Californian turned himself into Harvey Milk's dramatic doppelganger by changing his hair, manner of speech and accent and body language. Friends marveled at how he resembled the openly gay San Francisco supervisor whose murder sent 30,000 mourners into the streets for a candlelight vigil.

"Mickey Rourke rises again, and he's my brother," Penn said, acknowledging the other leading contender in the race.

On the red carpet, Winslet had confessed to being extremely nervous and asking her two children for advice on how to deliver her thank you speech -- to be restrained or go full-blown emotional, if given the chance.

She got the chance and confessed, "I'd be lying if I said I haven't made a version of this speech before. I think I was probably 8 years old and staring into the bathroom mirror, and this would have been a shampoo bottle. Well, it's not a shampoo bottle now," she said of her eight-pound golden man.

Winslet asked her father to whistle so she could locate him and added, "I think we all can't believe we're in the category with Meryl Streep at all." She then instructed Streep to "just suck that up."

In "The Reader," Winslet's Hannah Schmitz takes a teen-age boy to her bed -- and a shameful secret to her prison cell. The adaptation of the Bernhard Schlink best-seller uses the characters to explore how a generation of Germans lived in the shadow of the Holocaust.

Although the eyes of audience members glistened with tears and reflected sadness, Ledger's family tried to remain upbeat as he entered the Oscar history books as 2008's Best Supporting Actor for "The Dark Knight."

Ledger was 28 when he died of an accidental overdose of prescription drugs on Jan. 22, 2008. His death came seven months before the release of "The Dark Knight," which days ago crossed the $1 billion mark worldwide.

The late actor's parents, Kim Ledger and Sally Bell, and older sister, Kate Ledger, accepted the statuette as audience members rose to their feet.

The performer's dad called the experience humbling, as he thanked the Academy "for recognizing our son's amazing work," Warner Bros. and "Dark Knight" director Christopher Nolan for allowing Heath "the creative license to develop and explore this crazy Joker character."

The Oscar "would have humbly validated Heath's quiet determination to be truly accepted by you all here, his peers, within an industry he so loved," Kim Ledger said, to applause.

The actor's mother called Heath "such a compassionate and generous soul who added so much excitement and inspiration to our lives. We have been truly overwhelmed by the honor and respect being bestowed upon him with this award. Tonight, we are choosing to celebrate and be happy for what he has achieved."

Kate Ledger then stepped to the microphone and addressed her younger brother: "Heath, we both knew what you had created in the Joker was extraordinarily special and had even talked about being here on this very day. We really wish you were, but we proudly accept this award on behalf of your beautiful Matilda."

Ledger's 3-year-old daughter, Matilda, will inherit her father's statuette. His onetime girlfriend, actress Michelle Williams, will hold the Oscar in trust until their daughter turns 18.

The Australian became only the second performer in Oscar's 81-year history to win an honor posthumously. The other was Peter Finch, who died of a massive heart attack in January 1977 before receiving the honor for "Network."

In a departure from tradition, the award was presented by previous winners Christopher Walken, Cuba Gooding Jr., Alan Arkin, Joel Grey and Kevin Kline. A quintet of women similarly introduced the supporting actress contenders and the winner, Penelope Cruz.

Clad in a white 1950s Balmain gown, with a strapless neckline and hand-embroidery with gold thread, Cruz floated to the stage and asked, "Has anybody ever fainted here? Because I might be the first one."

Although her character of Maria Elena wasn't part of the title of "Vicky Cristina Barcelona," she injected wild passion, jealousy, sensuality and artistic temperament into the story of romantic entanglements involving two visiting Americans, one painter and one chain-smoking ex-wife.

The Madrid native, who soon will be seen in Rob Marshall's "Nine," was not a newcomer to Oscar's party. Nominated for her leading role in "Volver," she lost to "The Queen," Helen Mirren.

Last night, she thanked director Woody Allen "for trusting me with this beautiful character" along with frequent collaborator Pedro Almodovar and dedicated the Oscar to her parents, brother and sister.

"I grew up in a place called Alcobendas, where this was not a very realistic dream," Cruz said.

She recalled that, as a child, "Always the night of the Academy Awards, I stay up to watch the show," and considered the ceremony a moment of unity for the world. "Art, in any form, is, has been and will always be our universal language and we should do everything we can -- everything we can -- to protect its survival."

"Slumdog" picked up its first Oscar at 9:01 p.m., when Simon Beaufoy won for adapted screenplay and thanked the "other two musketeers," director Boyle and producer Christian Colson.

"There are certain places in the universe you never imagine standing -- for me, it's the moon, the South Pole, the Miss World podium and here," Beaufoy said. "It's a tremendous honor," he added, taking pains to single out the writer of the book "Q&A" which inspired the movie.

Dustin Lance Black, winner of the original screenplay Oscar for "Milk" and an openly gay man like the late Harvey Milk, recalled how his parents moved him from a conservative Mormon home in San Antonio, Texas, to California, where he first heard the story of Harvey Milk.

"It gave me hope," he said, to live his life and perhaps one day fall in love and marry. "I want to thank my mom, who has always loved me for who I am, even when there was pressure not to.

"But most of all, if Harvey had not been taken from us 30 years ago, I think he'd want me to say to all of the gay and lesbian kids out there tonight who have been told they are less than ... that you are beautiful, wonderful creatures of value," Black concluded.

"WALL-E" won the Oscar for animated feature, which gave director Andrew Stanton the chance to thank, among others, his high school drama teacher for "28 years ago, casting me as Barnaby in 'Hello, Dolly.' Creative seeds are sown in the oddest of places."

"Hello, Dolly" factors into the fantastic fun of "WALL-E," the story of the last robot left on Earth after mankind bolted.

In one of the night's upsets, "Departures" from Japan won for best foreign language film over the front-runner "Waltz With Bashir."

As TV viewers around the world could see, the inside of the Kodak Theatre shimmered with old-fashioned glamour, thanks to curtains raining 100,000 Swarovski crystals and a set that brought the musicians onto the stage and the audience closer than usual to the show's host, Hugh Jackman.

The Aussie is a song-and-dance veteran, People magazine's "Sexiest Man Alive" and, to legions of comic book lovers, Wolverine. They might have been perfectly happy, however, to see him join Beyonce Knowles and other young stars happily hoofing and singing to such tunes as "Top Hat," "Mamma Mia!" and "Over the Rainbow."

"Due to cutbacks, the Academy said it didn't have enough money for an opening number," Jackman joked minutes into the show but he assembled one anyway. At one point, he swept up Anne Hathaway and brought her onto the stage to appear in a musical spoof celebrating "Frost/Nixon," one of the Best Picture movies he saluted.

As previously announced, actor Jerry Lewis, 82, received the Jean Hersholt Humanitarian Award, given to a member of the motion picture industry whose humanitarian efforts have brought credit to the industry.

A native of Newark, N.J., Lewis and onetime comic partner Dean Martin made 16 films and he appeared in a couple of dozen more films ranging from "The Nutty Professor" to "The King of Comedy."

Eddie Murphy introduced Lewis, who brought the crowd to its feet. "For most of my life, I thought that doing good for someone didn't mean you would receive a commendation for that act of kindness, at least until now," Lewis said, with nary a funny voice or face.

"This award touches my heart and the very depth of my soul because of who the award is from, and those who will benefit. The humility I feel is staggering and I know it will stay with me the rest of my life."

He bowed to the audience and walked off the stage.

To try to surprise the millions watching at home, a number of stars slipped in a side door.

The arrivals area outside the Kodak Theatre was a dazzling, well-dressed mix of old and new stars, from the children of "Slumdog Millionaire" and "Twilight" hunk Robert Pattinson to nominees Brad Pitt, Angelina Jolie, Mickey Rourke, Meryl Streep, Ron Howard, Taraji P. Henson and Viola Davis.

This story contains reporting by the Associated Press.