In one of those you-wait-around-for-ages-and-three-come-along-at-once moments, I've had the opportunity recently to see both the 1924 and 1940 versions of The Thief of Bagdad. Leaving aside the present-day irony of hearing someone say "...and now, on to Basra!" without adding "...put on your flak jackets and check your rifles, men," I thought a comparison would be worthwhile.
First off, the 1924 version wins hands down in pretty much every category-- and yes, that does include sound and colour. The colours in the 1940 version mean you lose the lovely dreamy black-and-white atmospherics, and the 1940 version also has some really rubbish songs that make you wonder why anyone bothered (admittedly, I heard the 1924 version in a German open-air cinema with a really funky local jazz band providing the accompaniment, but even leaving that aside, it has to be said that you can get away a lot better with cheesy dialogue when it's just written on a title card). The special effects in both films (and it's quite clear that both were intended to be serious showcases for the state of the visual art at the time-- the UK release of the 1940 version was even subtitled "An Arabian Fantasy in Technicolor") were more or less on par when you take technological innovation into account: OK, the 1924 version has a "flying horse" with a ludicrous pair of wings strapped to it, but it's no worse than the model biplanes flying over Metropolis really, and the primitive Colour Separation Overlay on the 1940 version is equally giggleworthy.
One thing that I found particularly noteworthy was the issue of Islamophobia. I was mildly surprised, considering how prevalent it is in American culture today, that Islam and Arabic civilisation were presented in a very positive light in the 1924 film. I didn't notice any particular instance of a venal, grasping, sadistic (barring a torture-and-execution sequence, but it's no worse than you'd get in Henry VIII), greedy or lustful Arab; the citizens of Baghdad are all more or less normal people, and one of the key points in the story comes when a saintly mullah impresses upon the titular Thief that he can't just go on selfishly taking things all his life, and that if he really wants the girl, he'll have to earn her hand in marriage fair and square. I can't imagine anyone doing a mainstream film with a saintly and sensible mullah in it today. Mind you, the 1924 film is just full of Yellow Peril panic, in that the bad guy is a decidedly evil and sadistic "Mongol", he is aided by a treacherous and cruel Chinese slave-girl (played by the stunningly beautiful and criminally underrated Anna May Wong) in the Caliph's palace, and the "Chinese" names are mostly childish jokes along the lines of Woo Hoo and Ni Hi.
While the 1940 version is surprisingly free of that sort of thing (surprising in that there were less than 18 months to go till Pearl Harbour, and the Americans were pretty well aware that they'd have to go up against the Japanese sometime soon, witness Flash Gordon Conquers The Universe), the Islamophobia is there in spades. The bad guy is now a sinister lustful Arab named Jaffar (plagiarism suit against the Walt Disney Company pending), the Caliph goes from being a sensible if unimaginative man who wants what's best for his subjects and his daughter, to a bewhiskered old fool who is willing to give his daughter to the baddie in exchange for a clever mechanical toy, given to blind lusts, and openly expresses the wish that his subjects were obedient toy puppets rather than real people. Sabu turns up in the sidekick role, mostly because it's 1940 and Sabu is flavour of the month, upstages John Justin and promptly gets transformed into a dog, which I find full of disturbing undertones.
Which brings us to the issue of the message of the films, which was really the most unfortunate change. The 1924 version had a kind of earnest fairy-tale morality; the story revolves around how the Thief, who is living it large on the proceeds of robbery in Baghdad, encounters the Caliph's daughter while robbing the palace, falls in love and first attempts to take her the way he takes everything else: he masquerades as a royal suitor with a view to seducing her, but realises that he can't just love her and leave her, and actually goes out to earn her love, on the way gaining magical objects and so forth, with the ultimate result that her father cannot forbid their love, he has proved himself the best man, etc. The 1940 version, though, dumbs it down completely-- girl and thief fall in love during break-in, girl is kidnapped by bad guy when bad guy's attempt to marry her legally falls through, thief goes on quest to rescue girl while finding magical objects along the way, thief marries girl. No real message there, other than that clever and opportunistic people always succeed and Love Conquers All.
So: see the 1924 version if you like, ideally in an open-air screening. The 1940 version is pretty much reserved for fans of Sabu and/or Colour Separation Overlay.