I've had a long history of eating at this restaurant, and do feel that the new decor looks out of place. That being said, the place is catering to touristy foot traffic, and the prices and new look reflect this.
They've generally had good quality food, but portion sizes are beginning to diminish in the hopes of attracting a more Western crowd. The buffet service, though tacky and typical of Indian restaurants, was really what made Babur a great lunch spot.
If you're someone who purely goes for butter chicken, I'd recommend Babur's. It's not the greatest, but it certainly trumps the other two restaurants that lie east of Babur, and is within the downtown core.
If you're into spicy fare, you really have to tell the wait staff about this request. Another unfortunate evolution of their food is that it's not as spicy as it use to be in an effort to cater to a non-spicy eating crowd.