yep it's an arcade game originally appearing on the Neo Geo MVS arcade system. The 360 version has a small visual effect on the graphics but they are, essentially, the original graphics and annimations the original had (just with a visual filter applied). seeing as the opriginal ran at 320 x 200 res this is the only way they would look half good on a big telly.
The Neo Geo rocked as an arcade system. TONS of memory for it's tiem and very powerfull.
Oh, and if you like MS3 try to play the first one. It's smaller and more focused but the humor in it is brilliant!