I just got done watching the new DVD release and I hate to admit it, but it is a vast improvement in both shot composition and picture/sound quality. I also compared some shots between the 2 discs and unlike the Star Wars films, most of the changes are seamlessly integrated and actually look like they belong in the film. The most striking example would be the part where THX is mind locked while working with a radioactive isotope-the scene lacks any real punch in the original cut, but it becomes clear how dangerous the work he is performing really is, as there are many new shots of the isotope doing damage to the unit he is working on. The isotope itself was only a small piece of metal in the original, but is now a menacing glowing orange rod. The only bad shots come near the end where the CGI characters attacking him look fake and out of place. The very last shot of him standing in front of the sun is also changed; it is now a large red sun instead of a large yellow sun, perhaps indicating just how far into the future the movie takes place and why they live in an underground city (as a red sun could not sustain life). I only wish Lucas would have tried making the changes to the SW films more natural looking, and not just changes for their own sake. The only explanations I can think of for this oversight are:
He was not experienced enough in doing this until more recently (which does not explain why the rest of the SW shots were not redone)
This was a deliberate action to generate controversy, so he can resell us the original cuts for the 40th anniversary on blu-ray/HDDVD and then be hailed a hero for "realizing the errors of his ways" or some similar marketing scheme.
I tend to think the latter is a real possibility, but we'll have to wait a long time to find out.