Here's a capsule summary of my impressions: Nekketsu Kouha Kunio-Kun Special is not flawless, but it is better than original version. Which means it's at least playable now.
At its heart, Special is the same game -- a really, really early example of the arcade brawler. The title character (Kunio, the "hot-blooded tough guy") walks left, right, into and out of the screen, beating up identical gangsters. One button punches forward, and another kicks backward, and you can jump kick, grab, throw enemies, and punch them on the ground. Beat up enough enemies, and you progress to the next screen.
The realistically proportioned, but awkward, dudes of Renegade are replaced by River City Ransom-style sprites, still 8-bit in appearance. They're completely flat, but fight in a polygonal (and stereoscopic) 3D background, giving the appearance of paper figures in a diorama. It's a smart use of 3D, and a smart decision to keep the company's most iconic character design style -- see River City Sports Challenge for an example of what could happen otherwise.
Aside from the lovely new graphics, what separates this 3DS update from the arcade original is that it isn't freaking impossible. Being able to get through a single screen without dying makes a big difference! I'm pretty sure it's a matter of just easier AI enemies, and not a more versatile moveset or anything. Other modes are available in the full game beyond the arcade mode, but I didn't get a chance to play them at the show.
If this were a $5 download, like the 3DS's "3D Classics," I'd be telling you right now that I'm on board without reservation. But I'm pretty sure it isn't -- it had its own space in Arc System Works' TGS booth, for one thing, and it's listed separately on the company's TGS page from its "3DS Download Software." So instead, I'm going to have to think real hard about whether I want to spend actual money on a game that is, mostly, based on an arcade game I hate.
That is, unless it's never localized, in which case I won't even have the luxury of thinking about it.