Honestly though projects like Paint Wars http://originaltrilogy.com/forum/topic.cfm/Paint-Wars-A-New-Hope/topic/6921/etc don't actually do any harm.
As I posted before (in relation to Janskeet, I wonder what happened to him?) something of accidental brilliiance might come out of things like this. Though going by the footage I doubt it.
Just as long as there is no confusing mislabelling and due permission has been sought, this sort of thing is no different than a lot of other announced edits out there (most of which never turn into anything).
If the board rules are broken the mods will sort it out, if the content is somehow offensive just ignore it.