'The Naked Now' is the first regular episode of TNG and, as such, is severely misjudged. I don't have a problem with the writers doing a re-make of the original series episode 'Naked Time', but...so early in the series? To have the second episode of TNG a blatant re-make of an original series episode was a really bad idea. At this point, the writers should have been demonstrating that they have new and exciting ideas of their own, but...no.
It's also a terrible idea to have an entire episode centre around the characters acting...well, out of character. At this point in the series we don't have a firm grasp of who they are yet, and to have them running around behaving like drunken horny teenagers was a terrible lapse of judgement.
Like another reviewer noted, I remember this being a terrible episode, but upon re-watching it I have to say it's not as bad as I remembered. It's certainly not great (the jeopardy aspect is forced and wholly unexciting and some of the scenes border on annoying - mainly the Wesley ones, I have to admit). But there's a certain goofy charm about this and a number of genuinely amusing moments and one-liners. Data's joke about the woman from Venus still makes me laugh (I'm immature I know) and I still can't believe Data and Yar had sex...particularly when you consider what a sexless show TNG soon became. Yikesy.
Put the brain into neutral and you might find this amusing and mildly entertaining. Not a series high and definitely misjudged considering it was only the second episode...but still strangely compelling in a dumb, immature kind of way.