Almost precisely as you remember it, with some minor yet forgivable flaws.
I've played many of the home versions of SF2, and have yet to find an truly 100% arcade perfect incantation. The Live Arcade game is perhaps the closest to being just that, but it doesn't quite hit the mark. Many of the game's sound effects and voices are a bit off--the announcer's voice pitch is horrendously low especially during the Player Select screen. And there is a wee bit of loading time between fights--thankfully, this version has made significant improvements on these over earlier SF2 Home conversions (not counting the Super NES games)
The D-Pad on the 360 controller isn't as accommodating to these kind of fighters as you'd hope it to be--it isn't terribly bad; for the most part, it holds up well, but it's not as concise. Still, if you get used to it, then it isn't too much of a problem.
One of the more notable additions to this version of SF2 is the Quarter Match mode--emulating the experiences of people crowding around a SF2 arcade machine wanting a piece of the winner. Don't worry--no real quarters are needed here--just a drive to win and earn your online bragging rights (and achievements!)
Overall, this is a competent SF2 emulation that Street Fighter fanatics will definately keep busy with until Super Street Fighter 2 Turdo HD Remix (gah!) and, of course, the inevitable home release of Street Fighter IV.