Actually, the MK1 localization is pretty bad. It's not AT2-level, but it's pretty special in its own right.
Say what you will about the AT2 name changes, but at least the localized versions were phonetic equivalents. Jessica, Nikki, and Flay are not.
Also, while MK1's English is generally more comprehensible than AT2's, it's not really any more well-written. The dialogue in Nippon Ichi games is fairly straightforward and easy to translate well; the dialogue in Gust games is significantly less so. NISA's staff doesn't really have a firm enough grasp on English to convey much of the writing in Gust games properly - or maybe they simply don't care enough. As such, you end up with awkward phrasing, poor grammar, etc. all over the damn place. If I had to qualify my distaste for the script itself, I guess I'd say that their English simply isn't at the level I would expect from professionals.
(I'll ignore the typos everywhere. NISA has an extremely high typo ratio in all of their games.)
Aside from the actual writing, there's also NISA's nasty habit of making lines up out of thin air. Now, there's more of this in Phantom Brave and Phantom Kingdom, sure, but that doesn't make it any more excusable here. The most obvious example of this would be Vayne's characterization and personality; he's pretty much a huge wimp, but NISA felt like they had to have him act like a generic badass at arbitrary points throughout the game. It's pretty jarring, to be honest.
(Now, admittedly, the line that NISA made up along the lines of "We are the terrors who synth in the night" was quite funny.)
And I don't even know what shit they pulled during unvoiced segments. The world is probably better off not knowing, to be quite honest.
Anyway, MK1's localization was sub-optimal and AT2's was basically a complete disaster. I don't really have a lot of hope for the localizations of MK2 and Sakura Taisen V, to be honest, especially seeing as they are PS2 games being released in Q3/Q4 2009. ST5 might have some more work put into it because of the Wii port thing that NISA has going on, but I really doubt that they're going to pay attention to MK2 to any significant degree.
I can't comment on the dub because I am incapable of listening to any dub without wanting to shoot myself repeatedly. However, I am sure it is terrible.
...Actually, I have heard a bit of the dub due to Kefit annoying me with YouTube videos of it. Thus, I am in fact quite certain it is fucking terrible. Especially Pamela's dub VA... Dear fucking lord.
(Also, I would like to note that none of the complaints I have leveled against NISA in this post apply to their localization of Disgaea 3, which is excellent and essentially error-free. Well, except my complaint about dubs.)
Well, in the end... At least Pamela is moe.
And, uh, the games themselves are a whole lotta fun. I really enjoyed MK1 and I'm quite looking forward to MK2 despite my concerns about the quality of its localization.