First concerning the sound & music, I have to disagree with other reviews claiming the PC Engine version is superior on both counts. The sound is NOTICABLY worse than the arcade. The voices were loud, but the sound effects were weak, low quality PCM versions. Many of the sound effects were standard "static" sawtooth style noises used quite often in PC Engine games. In many cases, the beefy "thud" from a blocked hit in the arcade version comes out as a timid, high frequency, static hiss that makes you think you're playing on an old Sega Master system. I was quite put off by it, and I can't understand why anyone would think that is "superior" to the arcade sounds.
In terms of music, the stage tracks were merely studio recordings stashed on the CD as wave files. While a couple of them were better done than the arcade (like Terry's stage), I found I actually preferred the arcade tracks to most of the stages. Compare Mai's stage as well as Axel's stage, both of which are "performed" technically better on the arcade sound chip despite the CD audio advantage of the PCE version. Really though, its like comparing apples and oranges. The studio version might appeal to some, whereas the beefy FM/PCM versions from the Z80 arcade chip might appeal to others like me.
Graphics:
I was quite impressed with the visual artwork replication. Its clear the programmers on this home version put a lot of effort into making this a quality port. The problem comes with the limitations of the hardware. The PCE's lack of palette depth (512 colors compared to the Neo Geo's 65535 colors) really shows up in a few areas like sky horizons and the water effects seen in Mai's stage. Additionally, lack of parallax was quite evident when you compared each stage to the arcade. They did the best they could with the hardware, but being limited to 2 scrolling fields just doesn't hold up to the Neo Geo's extensive use of multiple scolling background composite masterpieces.
Then there's the issue of resolution. The programmers chose the default 256x224 mode, even though they had the option of going for a direct resolution port of 320x224, which is the same as the arcade. I can only conclude that once again, hardware memory limited them to reserving space for animation and as much background detail as they could squeeze.
Gameplay:
Here is where the game really shines. Unlike other crappy ports of the Fatal Fury series, this one actually "feels" like the gameplay of the arcade. Most of the animation frames are present, and there are those familiar move-counter-move features that used to drive people nuts playing against the computer. Some have commented on this game's difficulty, to which I can only say is try the arcade on level 8 difficulty. You'll be in a whole new world of frustration! I actually completed the arcade version on level 8, but it took $20 in quarters and a lot of screaming in anger ;-)
Conclusion:
At any rate, this is by far the best port of any Neo Geo game I've seen yet, but not "OMG PERFECT!" as you've seen from other reviews. Those guys need to take a closer look at the arcade before making statements like that. I give it 4.5 out of 5, missing a perfect 5 for the very poor sound effects and a couple of the transition in-game music tracks were poorly done.