This is a pretty great special, even to this day. Kids from 3-6 would especially love it. It's colorful, bright, and true to the book, not just to the point of the art style and the characters, but to it's very core and emotion.
The music with the happy, gloomy, and sometimes even scary images displayed (don't worry, nothing your kids can't handle!) gives kids, and perhaps even adults alike, a sense of empowerment towards the end. This is especially important, because everyone and their grandmother knows what happens in the story: birthday train breaks down, other snooty but powerful trains come along (excepting the old, less well-to-do engine) refusing to pull the train, when along comes a little engine who ends up pulling the whole train over the mountain against all odds. Knowing very well the ending, you would think that you wouldn't necessarily feel as worried for Tillie (little engine) as you would when you first read the book, but the story is told in such a wonderful, unique and perhaps even Expressionistic way that you forget about the ending for 20 minutes and immerse in the world that is Tillie's home and the gloomy mountain.
Animation fans will recognize the work of Dave Edwards, who, prior to working on this special, is known for the UK animated classic SuperTed. The cuddly bouncy style fits well in this half-hour special, and as mentioned earlier fits well with the style of the book. Fans of TV music in the late 80s will recognize Mark Mueller, who prior to this has done work with the theme songs for DuckTales, and Chip 'n Dale Rescue Rangers.
One of the few things keeping the score to go any higher is the bland setting and story, but keeping The Little Engine That Could interesting is no easy task, and the team has done the best they Could to keep it as interesting as it is. Recommended over the 2011 special any day.