I watched this last night on my 90-inch projection system and to me looks far superior to any television or home video version I've seen -- and I still own the 400-ft. Super-8 sound edition, too.
The image is impressively sharp most of the time; it looks like though I can't confirm Universal went back to the original black-and-white separations. All previous versions suffered from some pretty horrible matrix misalignments that are now almost completely gone. Further, all previous versions exhibited -- I don't know the technical term for this -- a kind of "hotness" with a lot of the color, where objects almost seemed to glow as if from heat.
What really impressed me most, however, was the color pallet. It is much more naturalistic where it ought to be -- none of this Natalie Kalmus-mandated garishness -- while everything involving the Metalunians jolt the viewer with bright primary colors. When the plane goes green at the beginning it's a startlingly bright green, yet the traveling matte lines are really solid and don't bleed all over the place. The red rays from the interociter are now more perceptible, while the weird purple scenes in the Monitor's room are really strong yet startlingly clear. I was also really impressed by the color inside the remote-control plane, which always looked extremely bland on TV, VHS, and DVD. Now it's genuinely eerie.
The increased sharpness also enables the viewer to notice neat little details. For instance, the big automatic door leading into the spaceship appears to be an optical rather than a mechanical effect. And there's more to see in Rex Reason's lab, aboard the spaceship, on Metaluna, etc.
I think those complaining about the way the film looks may not get that this is never going to look like contemporaneous VistaVision titles like WHITE CHRISTMAS or THE TEN COMMANDMENTS. Even so, I think this comes awfully close give the limitations of four-perf spherical widescreen Technicolor. Viewers should understand that THIS ISLAND EARTH chokes with opticals. Besides obvious special effects, director Newman seems to favor long takes that begin and end with dissolves. Rather than limit the optical work to the dissolve itself (switching to camera negative before-and-after), he and/or the negative cutters generally opt to leave the entire shot, effectively, as an optical. Even so, these secondary elements still for the most part hold up extremely well. (The stationary matte work, likewise, is excellent.)
Overall, I actually found this superior to the >first-half< of THE INCREDIBLE SHRINKING MAN, which I found extraordinarily grainy even where it shouldn't be (i.e., straight cuts with no effects elements). After the initial posts I was expecting something truly unwatchable but it's far from that. An expensive restoration could certainly improve some parts of the film, but I was impressed.