That was the case with me. I loved Grease when I was like 9 or 10, so when I saw Grease 2 in the video store I had to get it, and when I saw it I liked it because I was so young. And ever since than, I love it!
BillyL, I think you are right. I think the age thing makes a difference in how much people like the movie. I was in junior high, and I loved it -- and still do. I was 5 or 6 when GREASE came out (had to go to the drive in for that one) and it has always been my favorite movie. I'm not sure how much I would have liked GREASE 2 had I been an older teenager or adult when I saw it for the first time (although I still probably would have liked them), but there is a generation out there who loves the GREASE movies and are really looking forward to a possible 3rd. Everyone I know can recite them both.
So to all the people that think it's a doomed idea, I can certainly understand it. However, I think people are going to be surprised at the mid-20s to 30s population that will most definitely be running to the theaters!