Hudson's versions of Wonder Boy games were always inferior to the real deal. A slight exception may be made for Dragon's Curse vs Wonder Boy 3, but I like the characters much better in Wonder Boy 3. Hudson's character designs have always sucked pretty hard.
I take it you mean the character designs in Wonderboy series games developed by Westone? Hudson itself has a great history of character designs. From everything I've read and the fact that Westone developed original games for the PC Engine,
they were the ones designing everything. In Wonderboy III, the sprites were heavily compromised compared to the actual character designs. In Dragon's Curse, they made some of the sprites more faithful to the original character designs and others were simply evolved to accommodate more detail.
The only way that Dragon's Curse/Adventure Island is inferior to WBIII as an overall game, is the removal of the bonus content. But the addition of backup saving is still a pretty big deal.
Adventure Island is of course disappointing overall compared to Wonderboy, including the character design, but Master Higgins was simply a joke character.
Bikkuriman World is basically a 1-for-1 port, only re-branded with a license. Hudson didn't come up with new character designs.
Monster Lair again appears to be a perfect port minus the parallax (many assets were actually resized, even though it's difficult to tell). The character designs are not only the same, but much more faithful than Sega's Mega Drive port of the game. The quality of the overall game is also superior to the Mega Drive and most people seem to feel that the CD soundtrack makes it more enjoyable than the arcade version.
Wonderboy V/Monster World III has a main character which ranges from painful to boring depending on which artwork you look at.
The main character in Dynastic Hero also looks better and worse in various artwork, but the character designs of him and the heroine are both faithful to the series as they are evolutions of the characters from Monster Lair.
And the main character in Monster World IV is an evolution of the heroine in Dynastic Hero. They even included a similar side profile opening cinematic. The Wonderboy/Monster World series all about reoccurring themes and callbacks and Hudson's version are interwoven as much as Sega's.
The in-game player sprite in MWIII is pretty bland anyway and the Dyna sprite fits in perfectly.
It's a nice reward for fans of the original that Dynastic Hero updated some of the sprites and bosses, instead of simply doing a lazy straight port. Westone was bad at parallax, but at least they game us interesting variants to the bosses and gave them increased detail and animation. The final boss is also more faithful to the series, as it recreates the ending of Monster Land, while still giving us an original cyclops alien.
I prefer MWIII, but DH's changes aren't a radical departure from the series and among other improvements/additions, all of the carried over graphics have been updated with improved shading and color. It's fair to say that overall it balances out, but for fans of the series it's more about having a cool variant to play.