I played through Arcade mode on Hard. Vega raped me for a few rounds but Balrog nabbed me a couple perfects by just throwing hurricane kicks at him. Old tricks still work! D-Pad sucks but I think I got used to it on the Beta, only a couple accidental jumps here and there.
For the 9 different colors it is...
-3 Punch buttons (jab, strong, fierce)
-3 Kick buttons (short, forward, roundhouse)
-Start
-Hold any Punch (till color changes)
-Hold any Kick (till color changes)
Jab gets you the classic SFII color, as in the one in the picture. And I think Fierce selects the Hyper/Turbo colors, i.e. bluish white Ryu, blue Guile. Could be wrong on this though, I don't really remember. Jab is for sure default/original color though.