When it wasn't trying to be "EXTREME" Batman and instead focused on being an epilogue to Batman:TAS it was brilliant, but it was never able to create a memorable rogues gallery (lets face it, Batman has always been about the villains).
I watched it all the way through recently, and have to say that I appreciate it more now than when it originally aired.
You noticed that too -- the best episodes brought back Mr. Freeze, Talia, and so on. Inque wasn't bad, though.
I never saw Terry as the new Batman so much as the latest Robin, which is not to take anything away from him; Batman and Robin is a proven combination.
As Bort said, the returning villains were always better than the new ones, especially Talia. It makes me miss the weird JLU episodes that tied into Batman Beyond, mainly the epilogue with 30-something Terry and 90-something Bruce. That and the time travel one with old-ass Static Shock and a surprise Hal Jordan cameo.
Textbook howie long scream aside, I actually really dug the audio detail they put into things like the batarangs clinking to the ground and rattling. You get a sense of weight with that and the one that buries itself in the wall.
Ever see the episode where Terry fought Shriek for the first time? Shriek used his sound gizmos to neutralize all the sound in the factory, and the (completely silent) fight was disorienting just to watch. Nearly handed Terry's head to him too.