HORRIBLY. Kate became a total pushover, Humphrey somehow became the alpha male when he's supposed to be demonstrating the value of being on the opposite end of that particular spectrum, and BOTH of them are terrible parents.
I think they were handled fairly well considering the fact that they had different actors. With Kate, you still had that tough, yet soft feeling and with Humphrey he was still a jokester but he was also a little more stern and protective since he was now a father.
I guess you can say they were handle okay in the sequels. Not perfect or great, but certainly not the worse either. But then again, characters do end up changing once they do become parents because their roles as a parent have to be taken sometimes a little bit seriously.