A few things are handled quite well. I like the way Qui-Gon and Obi-Wan's arrival on the Trade Federation ship at the beginning of Ep1 goes right into the Darth Maul fight. There are a few nice touches like that. But on the whole, as much as I admire the effort that went into it, it just doesn't work as a film, and I found it difficult to complete.
The bigger problem I see is that I don't think it's possible that anyone who hasn't seen the original films could possibly follow it. No time is given to introducing the characters at all. Padme is just sort of there, and is apparently somewhat fond of Ani. The two Jedis are there, and are apparently Jedis. Jar Jar is there, but he doesn't say anything, which is welcome for the initiated but weird otherwise to just have this mute CG guy flopping around for no reason. Many scenes just don't make any sense, not that they necessarily did to begin with, but they're even more non-sensical here.
One major head-thumper: the "I don't like sand" scene is here. What?!? How do you chop a few hours out of the prequel trilogy and leave the single worst moment intact? Definitely led me to question the editor's priorities, that's for sure.
Another note I might give is to slow down the opening crawl. The crawl text itself is not too bad, and gives a reasonable explanation of where we are at the beginning of the story, but the text has already receded to the point of illegibility long before the opening theme music is finished. So we sit there for what seems like a very long time, just watching these tiny yellow lines march off into the distance. There's a lot of information there, it would have helped to have the extra time to read it. (I actually had to pause the DVD to take it all in.)
If the editor reads this, I hope he doesn't take it as too much of a slam. For what was probably an impossible task to begin with, I'd give it a solid B-. It's certainly better than watching the actual films, but only by virtue of being shorter, not better. It's an intriguing enough concept that I would take the time to watch v2.0, but I think it will take a lot of reworking to make it an enjoyable viewing experience.
Ron Moses