Depends on the film, really. Of course, in an ideal world you'd have both (to either extreme).
I usually prefer good characters over plot. Take for example any given Ingmar Bergman film (Cries and Whispers is a good starting place). It's not about what's going on, because nothing really happens. It's about the people and it's absolutely brilliant.
On the other hand, take any given horror film. It's a lot easier to accept poor characters in an interesting situation, doubly so if you're talking a slasher style film where the people are just cannon fodder anyway. I'd even go so far as to say in the case of most horror films, it's not as important WHAT happens as HOW it happens (but that might be a different discussion).
And bad plot with bad characters can of course sometimes work too. Example: Sinbad of the Seven Seas (starring Lou Ferrigno). Very little redeeming about it, and it's fantastic. Well, for those who appreciate that sort of thing anyway.
And a bit of food for thought from Philip K. Dick: he once wrote that a good short story is about what happens, and a novel is about who it happens to.