I beat him, but only once, and only with a good piece of luck... that delayed-hits thing Rain mentions rings a bell... I remember that there was some sort of cheap tactic to beat most opponents except Blues (or was that "Bleus"?), stick down+kick for a quick low kick, then a few punches, then down+kick, or something like that...
For a long time, the C=64 port was the closest thing to the arcade version and I played it to death... wasn't there some Choi-like big jump move as well?
Anyway, great game. Too bad part 2 sucked a bit.