I had a mixed bag of emotions seeing the Log Lady again as the actress Catherine Coulson didn't survive long past the beginning of the new series. It was especially disturbing to see her character with a shaved head and breathing oxygen through a tube. What bothers me is I'm not sure how much was real and how much was acting. Coulson and Lynch have had a long creative history, and obviously there was a lot of trust between the two.
It was difficult to watch knowing she had so little time left but it felt like she wanted to do it which is important and Margaret gets a lot of respect from Hawk which is also important.
She got treated with more deference than in the original series (calling her Margaret Lanterman rather than Log Lady for example) from most people aside from the new police officer (whose name I forget). I also thought her being banned from the police station due to a gum incident a nice comedy touch.
Overall I'd say it was a difficult thing to do but it was handled well.
In original TP, many called her the Log Lady, but people that knew her better/longer did call her Margaret: Norma, and the doctor ( AKA Donna's father ). And Cooper called her Margaret when she showed up at Sheriff's office with a message ( "something is happening, isn't it, Margaret?" )