How bad is it? It's hampered by a low budget and is very dated.
Should you see it? I say yes, but I have a high tolerance for this kind of stuff.
The plot follows the book fairly closely. The white rabbit is a guy with bunny ears and face painted white and looks like a mime; his costume is actually one of the better ones. There's a guy who wears skin-tight animal print pants and a lavender faux fur vest - try to guess which character that is. The Cheshire cat's smile is painted on a partial mask, Humpty Dumpty's costume looks like a child's Halloween costume, the Doormouse's head is papier mache and the playing cards have costumes that look like they're falling apart during their scenes. Mostly what one recalls is the large amount of interpretive dance, which is actually quite good.
It's hippies dancing to 1970's music. That'll decide what you think of it. "Alice in Wonderland" always has a psychedelic feel to it and this version makes the most of it.