How bad is it? Poor script, but not a terrible film by any means.
Should you see it? Sure, but not because it's so-bad-it's-good.
This film has had some blistering reviews and some praise; add the fact that Dorothy Stratten was murdered shortly after filming this and you have a cult film. The film's star is Avery Schreiber, who plays starship Captain Butt - and that's the point where you realize the writing's going to be a problem. There's parodies of Star Wars, Star Trek, 2001 and especially Alien (a critter burst's from Schreiber's stomach and runs amok. It also calls him "Mommy"). Stratten plays a robot that reprograms herself to love and she does okay with the role, though the emotional range of a robot is not a great stretch. Some of the special effects are quite good, especially given the budget, but some are laughably terrible and they're meant to be laughed at. That might be why this has made some lists of terrible films... that and the fact that most of the jokes don't work.
Angelo Rossitto is also in this. I met him the next year and asked why he was the only little person not in "The Wizard of Oz." He'd been hospitalized - you could tell it was still a sore point.