My brother, who is a huge fan of the show(and the one who turned me onto it) says for someone new to the show like me I should potentially stop watching the show after episode 16 because after that the "bad" storylines start and dont let up for a while. He says there are a few scenes/storylines in there that are OK but there is a ton of "filler" or storylines that border on being completely silly.  And there are a bunch of new characters introduced that dont fit well and many of our favorite characters are abandoned for a while.  This doesnt sound good to me!

If anythying, he says to go right to the FWWM movie after my last few episodes.

Any truth to this? 

Bad Twin Peaks is better than 85% of TV out there.  It is absolutely worth it for the David Lynch finale.

First of all, the highlight of Season 2 is the last episode (Lynch directed.)  And if you don't get the exposition to that you'll be lost.  It sheds light on FWWM, and there is also a key character introduced in the last stretch of Season 2 that appears in FWWM.

You could always watch FWWM after episode 16 and the rest if you're hungry for more.  Season 2 is not as abysmal as people make it out to be, though there are some goofy/weak subplots. It's why god invented the ff button.

Episodes from the pilot through to episode 16 are like phone lines, held just right by evenly spaced phone poles. After ep 16, the phone poles disappear, and the line droops to the ground, that goes on for about 13 episodes, and then at the end they place another pole, only it isn't a pole, it's a candy cane.

Skip the episodes except for the last one.

 Screw the naysayers! Watch 'em ALL!!!

The rest is definitely worth watching. There are some great moments in that stretch, besides the finale. I'm thinking of "I've got a new game" here.

If I remember correctly it goes like this:

pilot & episodes 1-16 = Solid gold.

episodes 17-24 = Crap. Can't believe it says "Twin Peaks" on the opening credits.

episodes 25-28 = Great.

episode 29 = Solid gold.

But hey, don't believe me. Sure you should watch "the crap episodes" at least one time to decide for yourself.

It sheds light on FWWM, and there is also a key character introduced in the last stretch of Season 2 that appears in FWWM.

 What character are you talking about specifically?

I would watch them all, even though some of those episodes are not so good, they all have their moments. One of my favorites is during the wine tasting when Dick tells Andy "No" as in he's wrong about a comment. I can't remember the exact dialogue but that just makes me crack up every time I see it.

It sheds light on FWWM, and there is also a key character introduced in the last stretch of Season 2 that appears in FWWM.

What character are you talking about specifically?

I would watch them all, even though some of those episodes are not so good, they all have their moments. One of my favorites is during the wine tasting when Dick tells Andy "No" as in he's wrong about a comment. I can't remember the exact dialogue but that just makes me crack up every time I see it.

I'm guessing Annie. 

By all means yes. Bad Twin Peaks is still decent television. There are many great moments, just as there are dud moments before episode 17 too. I personally hate episode 16 with a passion and prefer episode 23 to that one. Just be prepared for massive turds and plenty of Dick Tremayne. Keep your expectations low, especially during the 17-22 stretch. Skipping to episode 29 would be interesting, but it wouldn't make any sense at all as the main key and motivation for what happens in that episode is laid out well after episode 16 - for the supporting cast too.

One solution to this would be to watch the long recap narrated by Kyle originally shown before episode 24 (a long "previously on..." segment with a voice-over) instead of the 17-23 stretch. That would bring you up date on most of the 17-23 plots. Then watch 24-29. But even this would mean to miss some truly great scenes and build-ups, and two genuinely good episodes. (And you would have to find it, of course. It's not on the Gold set.)

My ranking:
17-decent
18-decent
19-bad
20-good
21-really bad
22-terrible
23-great
24-decent
25-great
26-good
27-great
28-really bad
29-amazing

The rest is absolutely worth watching.  Yeah, there are some pretty dull moments, but so much other good stuff in between.  And the finale...MUST. WATCH. :) It's beautiful.