I liked the director's cut. I've seen this movie (both versions) at least a dozen times. The release version (non-director's cut) has lots of little annoyances and dead ends. When Lauren is screaming from her window for help (in the release version) there are dubbed in voices of neighbors/New Yorkers screaming back and taunting her, which are just plain annoying. The director's cut flows better as a movie, filling in a few loose ends and plot points. Though, I do prefer the ending of the release version though, with John Goodman getting slaughtered at the end, even though it makes more sense in the director's cut. Plus, the director's cut DVD has a super sweet commentary and you can't go wrong with that.
The director's cut is the regular DVD version from Anchor Bay, even though there is no mention of it on the cover at all.
I never liked the VHS version. I had a tape of it off TV for many years and always assumed that the scenes were a part of the movie then when I started working at the video store in town, I put it in one day and was surprised to see a great number of scenes removed and the Goodman diner sequence moved to the end of the film.
The TV version and director's cut just work way better than the VHS one.
The one thing that really bothers me about the DVD is when the old man gets dragged out of the telephone booth the handset swings making odd noises, but in the broadcast (HBO and Cable) version you hear his brother say "Jeez, what'd you eat? Mexican food again?"