I decided early on not to compare this to the original, as the two incomparable in virtually every aspect. However, given that this uses the name, it has to be mentioned that this is nowhere near as good, and is just a weak attempt to cash in as much as anything. If it weren't for the cash cow aspect, this would probably be a 3-star werewolf film. Maybe even 3.5. Never 4. I think they should have just done that and abandoned any pretence at this being a sequel to American Werewolf in London.
Obligatory grumble aside, on with the film. Well, it's not that bad on it's own, but it isn't a classic. As a daft, low budget horror, it actually stands up quite well. The goofy humour is about right for this sort of film (but doesn't ever match the wit of the original), and the plot does have a little more to it than the average daft, low budget horror. There are one or two good set pieces (I liked the idea of werewolves in a nightclub, but don't think it was executed very well), but not enough to set it aside as a decent horror... However.
For me, this film (aside from the first para grumble) is let down by the fact that the werewolves look appaling. They are rendered in bad CGI, and look more like neolithic men or bigfoot than werewolves. The movement is bad too. This is very early CGI (I'm not a great fan of it now, let alone back in 1997), and shouldn't have been used, it is that bad. Similar to Alien 3.
I guess the main reason people would watch this was either as a werewolf film, or still looking for another buzz following the first film (and forgetting how bad this was the first time you saw it). Either way, I think, you'll be disapointed. It's 2-3.5 stars, something to watch if you're at a loose end and fancy watching a goofy horror film with a peculiar plot and some awfully animated werewolves, but don't expect anything more.