How bad is it? It's complete camp with terrible (but catchy) songs.
Should you see it? If you want to see an Adrian Zmed musical, it's a winner: yes.
"Grease 2" does not have the stars of the first film, nor great singers (Michelle Pfeiffer, for example, is merely adequate), but it does have exactly the same plot at the same place and with some of the same characters still in high school after being graduated in the first film. Watching nuns bowl while hearing the song "Score Tonight" does hold a weird fascination for me, though. "Reproduction" and "Prowlin'" just point out how sex-obsessed this film is. Though there are several dance numbers, none of the cast can dance. None of the songs have anything to do with the story. Pfeiffer's character has no redeeming qualities, so the attraction for her must be completely physical... which brings us back to "scoring." Max Caulfield is a complete zero as the male lead. For a 1980's musical, some of the casting is strcitly 1950's: Eve Arden, Sid Caesar, Dody Goodman, Tab Hunter and Connie Stevens.