This movie is so BAAAAD that it's GOOOOOOOOOD! On the bad/good continuum it comes full-circle and is one of my favorites of all time!
Most movies/stories have some sort of exposition, as in they tell why the Leprechaun is doing X or why this place is important, or how the antagonist got into his current position. This movie, heck no - you're thrown right into the midst of an already-happening plotline, no explanation, no reason why the Leprechaun's on some alien world with a hot chick, NOTHING! That's great! They didn't even TRY to make up a silly story to explain the badness, they just went with it!
Most movies have the gratuitous nude shot, be it just a breast, full frontal nudity, etc. This one does too, and the timing of it makes it HILARIOUS! *Just* when you're thinking "Hm, where's the obligatory gratuitous nude scene?" BAM! It hits you, and the context leaves your sides hurting from laughter.
They tried their hardest to get their point across that they're NOT being serious at all, and they do it well. This movie starts bad, gets weird, and then gets worse, and they don't pull any punches. There are random pants-eating scenes, mutants, and when you think you've seen it all, they throw in cross-dressing cybernetic marines!!
Rent it, think of Mystery Science Theater 3000, get some friends, and be prepared for the funniest movie you've ever seen!