I'm not sure how much of a difference between original sources Alpha has vs Something Weird there is. There's definately a huge retail price difference though. The Something Weird one says it's "digitally remastered", but who knows what that really means, depending on how truthful any given company is about the quality of their product. Maybe someone here has seen both versions? David maybe?
says the Something Weird disc is in really good shape. And it seems to come with a lot of extras and even another movie ("The Conqueror of Atlantis"), whereas the Alpha is gonna be bare bones.
I've never actually seen this movie myself, but know that the original Italian version just used puppets and things for the effects and when it was imported to the US, Jim Danforth was brought on to do the animation for the dragon.
Good luck and let us know what you think once you see it.