Controls aren't the issue here; fighters play exactly the same on Xbox as they do on PS2, Game Cube, or any other system. If you don't want to use the Xbox controllers, you can always get controller adapters to use PSX/PS2 or even Saturn controllers and joysticks on the system.
But to answer your question, playing with the larger Xbox controllers could be better, although I generally have little problem using the S-Type to do everything. Like with anything else, you get used to it.
I have played KOF 2003 on the Xbox already (I have a modded Xbox; if you don't know what it is, it basically means I have emulators on the system and can play all the Neo-Geo games off my Xbox HD, CPS2 games, etc.), and I don't have any problems with the controls.
As for why you'd want to get a port, Playmore has been very good about increasing the quality of their ports and added features to them with each new release.
KOF 2002 for the PS2 has 3D backgrounds and Geese, Goenitz, and Orochi Iori have been added to the cast.
Both KOF 2002 and SvC Chaos are now high res and have transparancies and blur effects on the special moves (which looks really cool). Samurai Shodown 5 has been announced to have a brand new story mode plus the bosses playable for the PS2 release (all PS2 releases are Japanese-only now, so we would have to wait months to see an Xbox port later on, and then hope that the story mode gets translated, which I doubt will happen)
The trade off is that the characters look a little bit thinner (due to the resolution being doubled) and are a bit pixellated, just like how the sprites in CvS2 look, but the overall look is awesome, and the better your TV/monitor, the better the picture looks (playing KOF 2002 PS2 on a projector looks amazing; there's no pixellation to be found either)
But the best thing about these games being ported to the Xbox and the biggest reason I'm going to be buying games like SvC Chaos AGAIN (Had it on AES, now have it on PS2) is because of Xbox Live support. You can't beat having online play in a fighting game.
Anyway, I wouldn't really worry about seeing KOF 2003 on the Xbox anytime soon...it won't come out until sometime next year. Metal Slug 3 is supposed to be released soon, SvC Chaos is sometime in the fall, and KOF 2002 is slated for the end of the year IIRC.
Lee