The first three volumes, the Heian arc is subtitled.
The final three volumes, the Tokyo arc is dubtitled.
Fortunately, the dub is a pretty close translation of the Japanese, so it doesn't drift at all. I didn't have any problem watching it with dubtitles, and I hate dubtitles as a rule.
There is a slight issue with onscreen text that isn't translated in the final volumes.
Bigger is the fact that Manga Entertainment dropped the extras completely for the Tokyo arc. And Otogi Zoshi is a series that is really complemented by its extras. The Heian arc was aided by some history lessons and insight into the era.
The Tokyo arc takes place in real life Tokyo locations, and the extras would have given some background into modern Tokyo.
If you just want the story, go with Region 2. If you want the extras, then Region 1 I guess. (I think Region 1 has single disc and 2 disc releases, so you'll have to be careful there as well).
I thought it was an enjoyable series, and I liked the way they did the story.
EDIT: DVD Pacific are selling the Region 1 two disc sets at about £9.50 a pop, while the twelve disc boxset is around £40, not including customs and P&P.