The first movie was great. The second wasn't so great, though it's not quite as bad as you've heard. Especially with there now being an even WORSE entry to this series - this being it!
Someone questioned why Warner Bros. didn't have the distribution rights to this entry. Well, at first they did. I remember reading a (very negative) review of this movie in "Variety" magazine, and Warner Bros. was set to distribute. It's quite obvious now that Warner Bros. threw away its distribution option (probably after seeing how horrible this movie is), and Miramax picked it up for a tiny release that lasted 5 minutes. (In my city, it only played for a few weekend matinees).
Oh yeah, what did I think of this movie? Quite frankly, it sucked. What were they thinking when they decided to jazz up the movie with contemporary rock 'n roll???? And most of the movie actually takes place not in the fantasy world, but in this world. The characters are especially obnoxious (especially the rock baby), and suffer from stereotypes. Plus, the movie seems to have forgotten a lot of what happened previously - the hero's dad knew about Fantasia, so the hero didn't have to hide anything from him - but for some reason, the hero keeps the incidents he was involved in a secret. The low point comes where the climax is not solved with magic or intelligence - but with karate. Yes, karate.