That's creepy as hell, I wish the makeup effects were a little better and they had left this as the ending, it fits the overall surreal atmosphere of the movie. It also fits in that in a twisted, alien-bent way Sam and Tony still love her, the other ending where they apparently kill her really doesn't make sense.
Wow thanks! Impossible to track down a physical copy of this for a decent price and while the other ending is better imho, this sure fit the movie in its own way too.
Look up "Xtro Xposed" on youtube, it's an interview with the director and he's hilarious in how brutally honest in what he thinks of his own work on this film and others, which unfortunately isn't very flattering which is a shame as I thought this movie was memorable.
SPOILER ALERT! This ending would've been better, in my Op. But, the one used in the Movie, led you, here, in a sense, unless she croaked like the lady in the Movie.