There are actually three versions. Gilliam's got released because Criterion figured he had a lot of fans who would buy it and that it was worth preserving.
It took years for Criterion to get the clearances needed for Gilliam's definitive cut of Brazil. I remember numerous postponements of the LD box set, and at one point the project was pronounced officially dead. Then a couple of things happened:
1. Ownership changes at Universal led to the departure of Sid Sheinberg, Gilliam's chief antagonist over Brazil. (Seagram acquired majority control in June 1995; I can't recall when Sheinberg left.)
2. Gilliam made 12 Monkeys for Universal. It was released at the end of 1995 and made money.
The following year, Criterion was finally able to release the Brazil laserdisc.
Just so everyone's clear, the original 132-minute U.S. theatrical version of Brazil was Gilliam-approved. It was shorter than the 142-minute UK version, but it was Gilliam's cut. The "Sheinberg" edit was only publicly seen on some TV showings before Criterion put it out.
By my count there have been 4 versions of the film:
Original UK theatrical release: 142 minutes (Gilliam-approved) Original US theatrical release: 132 minutes (Gilliam-approved) "Sheinberg" edit: 94 minutes: (Gilliam-loathed) Criterion Final Director's Cut (basically the UK and US versions put together): 142 minutes (Gilliam-approved)
On his commentary track, Gilliam says the Criterion version is the "fifth" version of Brazil, so maybe I'm missing one.
Sorry if everyone already knew that; it sounded like Norm thought the studio cut was the one released. Sorry if I was mistaken.