However... it failed to have an engaging plot. I mean I REALLY enjoyed the first one, and the sequel left me feeling a bit... hollow. I saw it in 3D because that was the only option at my theatre. Now, I don't hate 3D, but I don't think it adds several dollars worth of entertainment value per viewing. It's nice and all, but there are no instances where I think it adds so much to the film to be classified as "necessary." Good scenery will not make me love a movie.
Some of my acquaintances complained about the original movie's lack of stunning CGI quality. I stood up for Hoodwinked, defending it by right of "The STORY is awesome." I... can't say the same for the sequel. In the absence of a tight plot, the audience starts to look at the scenery. And it's not that impressive, especially with CGI technology becoming what it has.
So--problems. The writers had the characters do the thing, you know, where two characters are fighting, and we're not really sure they're that invested in what they're fighting about, and the argument is basically just a "let's move the plot along," thing. You know what I'm talking about. And it gave Red and the Wolf an almost uncomfortably sexual tension. (Which I am fine with in some interpretations, but it felt grossly out of place here.)
The first movie did a great job of taking a simple fairy tale plot, fleshing out all the characters, and letting the movie ride on their organically developed motivations. The second movie failed in every aspect of that. Also, although Hayden Panettiere did a good job, I couldn't help missing Anne Hathaway's richer and more complex voice-acting.
It had enough humor and enough references to other fairy tales to keep me chuckling: I would call it entertaining but not good. It's worth renting, popcorn for your brain.