How bad is it? It's actually one of the better killer doll movies.
Should you see it? Yes, but not because it's so-bad-it's-good.
I think this film has received bad reviews mostly from people who thought it was going to be a children's film. A killer claims that his puppet's responsible for murders, not him; his attorney takes the doll home and her daughter thinks it's a present for her (it's her birthday). Then bad things start happening to those who cross the little girl and the film becomes: is the little girl crazy and imagining the doll killing, or is it real? It holds up pretty well, I think. The director's done a number of low budget horror films (like "Witchboard") and they're probably an acquired taste.