I just recieved my copy from Amazon yesterday, and I don't see the problem.
I popped it in and gave a few (not all) of the games on the disc a whirl. I got exactly what I expected. The controls were just fine. I agree with the reviewers that say that an arcade stick is a must, but I have thought that with previous ports and when playing emulated versions as well. Some moves just don't work well with a gamepad, at least not in my hands. Still, everything outside of a few of the more tricky moves worked flawlessly. I didn't have any trouble throwing out combos or anything like that either.
I'd also read about issues with the emulation. I didn't see any problems that I can speak of. Sure, the skipping music during a load seems like an amateur programming oversight, but at least the music's still going, rather than restarting. Loading seems like something that should've been avoidable as well, but it's not painful. If you think that's bad, I highly recommend giving KOF '95 a whirl on PS1. While I thought that was a great port, the load times - even in single-fighter mode - killed any joy that I could've had with it.
Outside of the load issues, is it perfect? I won't know until I feel like doing a side-by-side. At this point, however, I don't feel as though my $15 was wasted in the least. Maybe the Japanese port is superior, maybe it's not. All I know is that it feels like KOF to me.
This monkey's gone to heaven.
I think it's a fantastic game. In fact, you might be referring to my review on it with the minor music issues. I think I even made a similar post to yours back when I got my copy. Everyone was saying the controls were problematic and etc. But really, they work perfectly. It was all about KoF 96 to me and I loved it!
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