Well, Nichols did direct the all-star SEAGULL in the Park in 2000 with Streep, Kline, Walken and company, but my sense there as well as with SPAMALOT is that 99% of his work is done in casting and he really doesn't bother to do much actual "directing," but acts more as a traffic cop at best. In SEAGULL, some performances were solid, some were awful, some were bland, and no attempt seemed to have been made by Nichols to impose any overall vision on the production or performances and as a result they never cohered as an ensemble and it was just a series of unrelated star turns with acting styles that were all over the map. It was fun to watch because of all the stars, but it was pretty bad Chekhov.
I also thought SPAMALOT lacked a truly coherent overall vision and only worked at all because of the great cast and those classic sketches that much of the audience came into the theater knowing by heart (and recited aloud line by line along with the performers on stage) .
I think he probably was a great director once upon a time, but with his shelf full of Oscars, Tonys, Emmys and Grammys, I get a sense that he basically coasts on his reputation and no longer has any desire to actually work all that hard anymore.
"What a story........ everything but the bloodhounds snappin' at her rear end." -- Birdie
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"The Devil Be Hittin' Me" -- Whitney