I'm actually not really a fan of either scene. The musical number idea does not really fit the film at all. (It may also be because I simply hate musicals..but to each their own.)

The original Lapti Nek sequence fit the laid-back, mysterious and smoky atmosphere of Jabba's Palace almost like some of the musical sequences in Casablanca does for the laid-back, mysterious, and smoky atmosphere of Rick's. The new sequence has CGI aliens coming out at the screen...(soon to be in 3D...oh dear god...) complete with red lips and dripping saliva. It's not the absolute worst thing in the world, but it really doesn't fit the movie at all.

So...bad puppets in the background or bad CGI aliens in the extreme foreground-you take your pick.