I have actually played through both versions, and while the cut scenes do enhance the Nexzr experience somewhat, they are not necessary to the exhilarating shoot-'em-up experience of this great game. I recommend that anyone who enjoys shoot-'em-ups acquire a copy (either version) of this game if possible.
What's the price difference?
I think that the Carnival version has been running about half the price of the regular release.
I got my copies about a year ago for about $40-50 for the Carnival release and about $100 shipped for the regular release, if i remember correctly.