I still think it looks horrible myself, but I am a grumpy old Lemmings purist.
I'd rather they didn't bother with the blood, it ruins the happy, joyful nature of the game, I wasn't perticularly fond of "Oh No!" having every other trap spurt blood out of the lemmings.
I've always found it strange how it never warranted anything above a 3+ rating either. Sure, it's cartoon violence, but it's not the sort of thing Cartoon Network would show.