I just watched the American version of this the whole way through for the first time in well over ten years, and was reminded why I hadn't watched it since I obtained a subtitled copy of the original. While from a pacing standpoint it's arguably an improvement, the overall quality of the film is severely compromised. Most of the alterations made for the U.S. release are just...well, stupid.
That being said, the Japanese cut is quite enjoyable, though as I said, it seems to get bogged down from time to time in terms of pacing. The Kong suit does leave a lot to be desired as well. However, I love the comical approach taken with both the human characters and the monsters. I can understand why it would turn some people off, but it's a joy for me to see Kong scratching his head or getting upset about his scorched fur and Godzilla bobbing up and down and clacking his claws together. The way Ifukube's thunderous score offsets the obviously humorous tone of the film is interesting. As for the effects, it's easy to overlook the quality of the vast majority of them when looking at the Kong suit or the admittedly poor composites, but I find most of them to be quite well-done.
And Ichiro Arishima is magnificent as Tako. "Doesn't that infringe Kong's rights?!"