But what struck me while watching it the second time is, there's actually the skeleton of a good movie here. It's just the flesh that's rotted. You can basically take the structure of the movie -- the scene order and the major plot beats -- and turn it into a half-decent or even decent movie by changing the scenes' contents.
So. As a thought experiment I'm figuring out how to do this. Not wanting to watch the whole movie again I'm basing this on Tfwiki.net's description of the plot's events, but I'm going to go scene-to-scene, basically.
Movie opens in Shanghai. There are three problems with this collection of scenes: 1) The Twins, who everyone hates, 2) the fact that the Decepticons aren't doing anything menacing when NEST comes in to kill them, and 3) the way Prime executes Demolishor. These are all easy to change. The Autobots participating in this scene are Optimus Prime, Mudflap and Skids (the Twins), the Arcee triplets, and Sideswipe. Skids and Mudflap don't do a Goddamn thing throughout the whole fight, so cut them entirely. Have Demolishor and Sideways doing something with archeological theft, and then Optimus, Sideswipe, and Arcee kill them. For this version of the movie we're going with the earlier-draft idea that Arcee is one Autobot in three bodies, who can transform between motorcycles-and-small-robots or combine to form one conventionally-sized Autobot robot.
Arcee and Sideswipe gang up and kill Sideways with considerable relish. Optimus defeats Demolishor and then things proceed as they do in the novelization (which I have not read, but heard described), where Optimus offers Demolishor asylum and Demolishor spits in his face, brags about how he'll do more violence to humans in the future, and then Optimus apologizes and finishes him off.
Then there's the whole Sam-is-getting-ready-for-college sequence of scenes, which can stay exactly as they are, except the scrap drones created by the All Spark shard are less funny and more dangerous. Don't change anything about Sam's parents, they're great. Not everything needs to be dark and serious. Have this end with Sam and Bumblebee trying to report the chaos to Optimus, but the Autobots are in a comm blackout because they're talking to the President's representative.
The "NEST Liases With Galloway and General Morshower" sequence is next. This is almost okay. Problems, again: Twins, and the way Galloway is an utter dick. Twins aren't here, because they don't exist, so give Sideswipe and Arcee the brief characterization the Twins got -- they're high-fiving each other over how well the op went. Not the same characterization, obviously, just the same time devoted to different characterization. Meanwhile, play up that Galloway makes some valid points, and have him be less of a dick about them.
From there we move back to Sam dealing with his parents and roommate. Guess what? This whole sequence can stay pretty much exactly the same! It's not great, but it's serviceable. I might slightly play down Leo's status as comic relief, or maybe not. I would also probably foreshadow Alice as a Pretender a bit more heavily.
After that is Ravage's infiltration of Diego Garcia, the Decepticon recovery of the second All Spark shard, and Megatron's resurrection. The only thing I'd change here is make it so that Scalpel (the tiny doctorcon) uses the shard (and Scrapmetal's remains, after the other Constructions kill him) to revive both Megatron and Blackout (because I like Blackout). Then we have Blackout sub in for Grindor for the rest of the movie, which makes no difference because Revenge of the Fallen's Grindor looks exactly the same as Blackout from the first movie anyway.
(BTW, I'm not calling it the "All Spark" by mistake. That's the official name for the thing in the movie continuity. I think "Allspark" looks and sounds cooler, but whatever.)
Sam goes to the party and plans on leaving early but Alice tries to grab him. Instead, Bumblebee grabs him and they go off to meet up with Optimus. Establish the timing such that it's clearly Bumblebee and Optimus that make Sam miss his webcam date with Mikela, not Alice. Optimus explains that he needs Sam to speak on his behalf to the US government, and Sam explains to Optimus that a) the government has no reason to give a shit what he, Sam, thinks about giant robots, and b) Sam loves Bumblebee and likes Optimus and the other Autobots, but wants out of this crazy life. He brings up the kitchen scrap drone incident and missing his webcam date as reasons why. Optimus is sympathetic but thinks Sam is missing the bigger picture and tells him "If we can, we'll be here if you need us, but we may need your help, too." Sam knows Optimus is right but has trouble acting on it.
Megatron flies to the Nemesis on one of Saturn's moons and meets up with the Fallen. Change it so that Megatron chafes under the Fallen's rule a bit more, and Starscream is caught between sucking up to the Fallen and sucking up to Megatron. Otherwise it's the same scenes.
Next comes Sam's breakdown in the astronomy class. I would probably sub in some Cybertron flashbacks here that hint at Primus's existence (setup for the sequel) during Sam's freakout, or maybe that's cheating.
After that is Mikela capturing Wheelie. I'm actually not sure what to think of Wheelie here -- he works better than he should. What I'd like to do is establish that Wheelie is a scrap drone -- one of those little robots animated by the All Spark during the climax of the first movie, who developed intelligence and got recruited by the Decepticons. He's feral and mercenary and doesn't have a lot of loyalty to the Decepticon cause but he's afraid of them enough to be doing what they say.
Then Mikela goes to Sam's college and we have the big fight with Alice. Change the framing of the Sam Kisses Alice scene so it's clearly more Alice being aggressive and Sam trying like hell to resist -- at no point does he give in and start kissing back, as he does in the actual movie just before Mikela walks in on them.
At this point I cheat and put in a scene with Optimus realizing something could be up with that All Spark shard imprinting on Sam's brain, this explaining why he, Ratchet, Ironhide, Sideswipe, and Arcee head off to grab Sam, setting up the rescue in the warehouse later. Better yet, have Ratchet think of it when Optimus mentions the kitchen incident to him. They meet up with Bumblebee on the way.
Sam, Mikela, and Leo get captured by Blackout and delivered to Megatron, Starscream, and Scalpel. The autobots rescue them, this turns into the fight in the woods, Optimus dies, and Ratchet and Ironhide accompany Optimus's body back to the military base while Bumblebee, Sideswipe, and Arcee go into hiding with the humans.
With the last Prime dead, the prison holding the Fallen in the Nemesis breaks and the Fallen heads for Earth. Megatron goes public. The Decepticons capture Sam's parents.
Then there's the scene that establishes Sam, Mikela, Leo, Bumblebee, Sideswipe, and Arcee are hiding out. Bumblebee can't talk. Sideswipe and Arcee don't like Leo and give him a hard time, and not in a friendly or joking way. They treat Sam better. During this time it becomes clear that Sideswipe and Arcee are in this for the Decepticon-fighting, not the classic Autobot altruism. However, Arcee bonds with Mikela because Sam has a pet robot and Mikela is Sam's girlfriend who loves motorcycles and Arcee is a girl robot who turns into small collection of motorcycles and Jesus Christ, Michael Bay, this subplot writes itself, what the hell is wrong with you?
Ironhide and Ratchet deliver Optimus's corpse back to the NEST base and Galloway stands NEST down, revealing that he actually is sort of an xenophobic asshole. These scenes are basically the same except that Arcee and Sideswipe aren't standing around in the background.
More Sam and Co. hiding. They decide to read the glyps and Leo suggests they track down "Robowarrior," a.k.a. Simmons. Again, same thing, exept with Skids and Mudflap gone and replaced by a less stupid Sideswipe and Arcee. Things otherwise proceed as they do in the movie until the Smithsonian. Arcee, Sideswipe, and Bumblebee wait outside while Sam, Mikela, Simmons, Leo, and Wheelie go in.
At the Smithsonian... okay, there's one moment in the movie I really like. Sam and Co. are in the Smithsonian and use the All Spark shard to revive Jetfire, and then Mikela notices the Decepticon symbol on Jetfire's landing assembly and panics and screams out "It's a Decepticon!" in this frantic tone that sounds like it hurts her throat, because she's terrified and in that second, telling everyone else that Jetfire is a Decepticon and Wheelie has played them all and if they don't get out of there right now they're all going to die is way, way more important than preserving her voice.
So make Jetfire scary. He wakes up and he's not decrepid; he's cold and scary, and the fact that he wants to talk makes him even scarier because a Decepticon that wants to kill you is at least behaving predictably, but a Decepticon that wants to talk to you but may be planning on killing you when he's done is unnerving. So everyone's surprised when he decides to change sides.
(I like Jetfire in the movie. I do. He's funny. I found him genuinely entertaining. But he doesn't work for this re-conception. I am not anti-humor; I'm fine with Simmons and Sam's parents as comic relief. Just not Jetfire right now.)
Sideswipe thinks this is awesome because he's fought a lot of Decepticons and knows they're fierce, so having one on his side is gonna be great, especially one as big and old and powerful as Jetfire. Arcee thinks the only good 'con is a scrapped 'con, and wants to convince Bumblebee to reject Jetfire's request for asylum and fucking execute him. Jetfire thinks they both sound like Decepticons, not the Autobots he remembers. He bridges them all to Jordan and explains the backstory, then leaves, because if Autobots are like that these days, he may want nothing to do with either side. He flies off to refamiliarize himself with the state of the war.
The backstory is largely the same, except the Primes didn't make the Tomb of the Matrix from their own corpses. They just hid it, in a tomb concealed by the power of the Dynasty of Primes -- it cannot be found until the last Prime is dead. Then without the power of the Matrix, the Fallen wasn't strong enough to defeat the rest of them all together, and they imprisoned him, again in a prison sealed by the power of the Dynasty of Primes. The Primes died later, or at least ascended to a higher plane of existence or crossed over to the next alternate timeline or something. This was all thousands of years ago and Cybertronian history doesn't record the specifics of the events between this prehistory and the point where conventional historical records began. Years later, well into conventional Cybertronian history, Megatron found the Fallen's prison and built his flagship around it and tried to ingratiate himself with the Fallen and that's how Decepticons came to be, etc. etc..
(Hey, did you know that the Fallen's original name was Megatronus Prime? Megatron renamed himself after the Fallen when he founded the Decepticons formally. This is official Hasbro continuity! It probably doesn't need to be mentioned in the movie, though.)
Everything else happens as it does in the movie until the Tomb of the Matrix. At the entrance to the Tomb, Arcee and Sideswipe get into a fight, because the Jetfire issue has really driven a wedge between them. They've always been conflicted over whether humans are worth fighting for, and now they're conflicted over how far they'll go to win fights, and it comes to blows, and Arcee throws Sideswipe through a wall, and hey, look, Matrix! The revelation that the Matrix is real and there could be a way to bring Optimus back snaps Sideswipe and Arcee back to their senses and they realize he'd be disappointed in them if he could see them. It becomes clear that at least part of the reason they've been assholes lately is they're grieving for Optimus.
The rest of the movie proceeds as filmed, with the following changes (presented in brief because I'm tired of typing this):
-Leo's comic relief is played down a bit.
-In the final fight, Arcee doesn't die, although one of her three bodies is destroyed. In the final scenes her remaining two bodies combine to form a new (smaller) big body, enabling Hasbro to sell an extra toy.
-In every scene where the Twins were being stupid, instead we get Arcee and Sideswipe being awesome.
-Megatron betrays the Fallen in the end, contributing to the Fallen dying at Optimus's hands. Optimus doesn't say "Give me your face!" at any point.
-It's much more explicit that when Sam used the Matrix to revive Optimus, the All Spark migrated from Sam's head into the Matrix (as it migrated from the cube fragment to Sam's head at the beginning) . At the end of the movie, Optimus's narration establishes that with the power of the All Spark restored, and 'cons like Wheelie considering defecting back to the Autobots following Jetfire's heel-face turn and heroic sacrifice, there may now be hope of healing Cybertron... but with Megatron back and no longer subservient to the Fallen (also, no longer dead like he's been for the past three years or lost and frozen on Earth like he's been for the several thousand years before that), the loyalist 'cons may now present a greater threat than they ever have before.
Keep Devastator's balls. Simmons' scenes are always ridiculous, and that's okay.