Good, but a bit rough around the edges. Also, Genie is annoying.
I came across this movie as a kid, and after rewatching it now, I conclude that although it wasn't as awesome as I remembered it, it's still a pretty good continuation to the original Aladdin (I never watched the Return of Jafar, and it seems that you don't have to to follow the story).
The story is interesting and for the most part very well-handled. The new characters are decent, although aside of Cassim, they are rather forgettable; I completely forgot about the existence of Sa'luk, for instance. Cassim himself is a very nice and likable character. The animation is good for the most part and overall, the movie is rather satisfying.
I have only a few gripes about the movie:
First off, Genie constantly throwing all sorts of references and Anachronism Stews
at the audience comes off to me as rather annoying; I don't know if he's funnier to Americans, but I, an European, can't find him funny in this movie. He was more tolerable in the first one...
Second, the fact that Genie can at any given moment solve all of the issues at hand with his magic, but instead wastes time on aforementioned references and lame jokes. If they weren't going to use his magical talents in a way that makes sense in-universe, then they should have just made him stay permanently on his vacation after having his handcuffs removed. Seriously, besides him repairing the palace and giving clothes to Aladdin and his father, what DID Genie do of actual substance in this movie?
Third, the movie feels a little rough around the edges. There are moments where the movie jumps a bit too fast between various shots - it would have worked better if it was slowed down a little and had a few more stuff thrown in the middle of such moments (the most prominent example being the first fight between Aladdin and Sa'luk, which comes off as a bit jumpy, as if they didn't animate enough frames or something). Also, some of the dialogue seems a little rushed (like Iago asking Cassim if he's really going away, and then being all "Bye" after his response).
Overall, besides the obvious problem of Genie, the movie works and I liked it.