Yes, the original version of "Highlander 2" was garbage. "Highlander 3", while not as good as the original, is better than 2.
However, the original "Highlander 2" has been replaced now by a different version called "Highlander 2: The Renegade Version" which is about 20 minutes longer and, I'm told, removes all references to them being extraterrestrials (I've bought the DVD but haven't got round to watching it yet). It seems like this was widely regarded as having been a mistake at the time and has been quietly dropped since - at least I've never heard any more alien references in what I've seen of the TV series either.