The King of Fighters '95 made two positive additions to the series - it allowed players to form their own teams of three fighters, and it also introduced series staple Iori Yagami. Beyond that, however, it didn't really do enough to separate from the '94 installment, and it actually moves backwards a little bit in some areas.
So, we thought Rugal Bernstein had died horribly at the end of the previous tournament, but it turns out that he survived somehow. Not only that, he now has some sort of cybernetic implants that make him insanely powerful. He sets up yet another King of Fighters tournament via which to hassle all of SNK's favorite characters, and just about all of the roster from the previous games returns. The only change is the departure of the U.S.A. "sports" team, who are replaced by Iori Yagami, Billy Kane from Fatal Fury, and Eiji the ninja from Art of Fighting 2. So, arguably, the roster is very slightly improved.
The gameplay is not really improved at all. Of course, it was quite good in the previous installment, so this isn't really a problem, but the fun stuff like rolling dodges that later became a series staple had yet to show up here. The roster is pretty well balanced here, with all characters competent and usable.
What has taken a small step back is the art and music. While the sprite work is large, detailed and fairly fluid here, the backdrops are pretty uninspiring (save for the busy bar scene). The character portraits and post-match art are also among some of the ugliest of the series. The music is where things have really gone downhill - most of the cool remixes from the other SNK games have been dumped here in favor of tepid original pieces. I know it's unfair to compare it to games that came later in the series, but the excellent music from KOF '96 onward is mostly not present here. It's not even as good as '94s range of songs.
Probably the biggest barrier to enjoyment with this one is accessibility - in typical SNK style, the difficulty is tremendous right out of the gate, and the merciless computer doesn't give you any kind of a learning curve to gradually get better or sharpen your skills. Either you kick butt when you step up to the machine or you get kicked right off.
All that said, King of Fighters on a bad day is still better than most fighting games on a good day. With the other options available at the time, much less all that's available today, I just didn't feel it did enough to distinguish itself, and ended up being one of the more skippable entries in the overall series.
* Gameplay Video