Still getting better. This episode is the best one of season one - of course, that doesn't mean it's good. The plots are still growing, the characters maturing, starting to get comfortable being on set. The acting is improving, and as such, leads to better quality episodes.
I do like this episode. It isn't amongst my favourites, but I don't dislike it. It doesn't compare to later episodes, and it's a miracle the show survived, but it really represents that you should give things a chance. Watch as Kramer's hair grows taller and taller, for the taller the hair, the better the comedy!