I liked the stylized modernization of the '96 version. Many times I think the original emotion of Shakespeare is lost in the translation of centuries, and versions that play more to the original time period do so at the audience's loss of nuance and pun. Language has changed greatly in the centuries since Shakespeare, and while we can still read it, we are hard put to fully understand the social references and common jokes of the period. In modernized and highly stylized adaptations I think we are able to view new sides - and more modernly relatable sides - of the plays, and I think at that point our enjoyment of the play is more akin to the original audience's enjoyment, because we can more fully understand it. Especially when it comes to Romeo and Juliet, which is actually highly satirical and rather critical of the romance genre. (Yet that side of the play is often ignored by modern productions.)
At any rate, Shakespeare has a remarkable staying power and there is nothing wrong with modernized versions of his works. I loved the '96 version not only for its stylization, but also for it's use of the original script. The anachronistic void between setting and speech was awesome! Of course, in general I tend to favor stylized Shakespeare, like Julie Taymor's Titus Andronicus, or this really trippy A Midsummernight's Dream I once saw...lots of doors. Lots of doors.