Good effort, but could be a lot better...
You really need to turn the volume down. I was using headphones and it really hurt my ears. It also gets a bit distorted (I think the word is "clippy"), especially around the 0:45 mark.
That instrument 0:40 is off key, and again when it returns at 0:53. The one at 0:45 is alright (but distorted).
Everything Holy Crap said is right. Either bring the guitar up an octave, or switch it for another instrument.
Now, the arrangement...
Most of the song sounds pretty empty/bland. There may be parts of the original missing, or it might just be that the song sounds more "full" with the old 8-bit sounds. Try adding some chords/harmonies if you can. Drums might also help.
It's very conservative (in other words, you haven't actually added anything to the song). If you're able to try adding melodies, harmonies, etc. If not then at least try playing around with what's there a little more.
Judging by the out-of-key synth, I'm guessing that this ISN'T a MIDI rip, so you get points for that. =)
NOTE: My score may seem a bit harsh compared to other reviews I've given (I can't remember if I've reviewed any of your songs before), BUT it's because I've changed my marking system. I'm now marking VG arrangements like this:
2/5 for arrangement (How the parts are put together, transitions, how original it is, how much it differs from the source, etc.)
2/5 for production, how enjoyable it is, choice of sounds etc.
And that's 4/10 overall, 2/5 on the vote.
(In short, from now on it'll be much harder for ANYONE to get a high mark from me)
Still, good effort Squiggley! Keep at it and you'll improve. And even if you don't plan to redo this song, keep this stuff in mind, as it may help with later mixes.
Feel free to ask me for a review if you ever want one on any of your songs. Send a Youtube vid of the source in case I've never heard it too.