Got the new Bad Lieutenant DVD - the transfer looks improved to me, but I haven't done a direct comparison with the old disc so it's hard to be certain (especially since I've upgraded my TV since the last time I saw the film). The commentary's pretty good - my only real complaint is that at different points in the film, the commentary goes out of sync with the film. It's a problem with whoever edited the commentary together, not an authoring issue - when the film dialogue fades up during pauses, it's still in sync. But Ferrara and Kelsch will often start talking about the next scene (with specific on-screen references) 20 or 30 seconds in advance of when it appears. A bit later on, things lag in the other direction and the picture gets ahead of the sound. It's frustrating, but if you pay attention (and know the film pretty well) it's not going to ruin things, really, but it is sloppy work. Don't hold your breath for an updated edition either; Ferrara's distributors don't work like that.
DP Ken Kelsch also points out on several occasions that the color timing isn't really to his liking - mostly he feels like the image has been lifted up out of the shadows too much, that certain scenes ought to be darker. Again, Ferrara and Kelsch share a good laugh at the prospect of the DP actually being asked to supervise a new transfer. For what it's worth, the film did feel less gritty than the last time I saw it, but not in a bad way really. It just felt like a nice clean transfer, rather than a less than stellar one. You can still see dirt on the white credits.
Also, as if it were ever really in doubt, "Signifying Rapper" is still gone from this version (prompting additional humorous griping on the commentary.) Herzog's remake is briefly mentioned, but it's nowhere near the total freakout you might expect.
Haven't had a chance to look at the making-of yet, but it sounds like another worthy extra. You can find this edition for as little as $10 (B&N online) or $15 most other places, totally worth it if you like the film.