IMO, KOF series needs two things:
online
First and foremost, this is an arcade game. That said, the home versions have had online for over two years now. PS2 has been Japanese-only, but the Xbox versions released all had online. What SNK needs to do is also release these games for the 360/PS3, be it via ports or as downloadable games.
and better sprites/art, i am not asking for 1080p HD awesome quality here, something like SF3rd Strike would be a splendid start.
I don't think you're going to see a 2D fighter animated like SF3 ever again, unless SF4 is somehow 2D, 1080p, AND animated like SF3. But I'm not holding my breath. The main reason for this is the HUGE roster...there are far more characters in KOF than there are in SF3. SNK has had their highly animated games already, like AOF3, Last Blade, and of course Garou.
KOF XII, by the way, is going to have entirely new sprites. Here's hoping for amazing animation and HD. SNK isn't rushing this game out, which is definitely a good thing.
as for the game itself, i am not the fighting type guy, so i am happy with anything that is fun. (VF is no fun!)
Oh no doubt KOF XI is the best 2D fighter that's been released in the last five years. I keep saying "trilogy of awesomeness" in many SNK posts, and that's because SNK hit a triple play with KOF XI, NeoGeo Battle Coliseum (which is probably more accessable to anyone than KOF XI and more "Capcom friendly"), and Samurai Spirits Tenkaichi Kenkakuden (which has EVERY SINGLE character from SS1-5, right down to the referee and the animals, plus new ones).
To be honest, I always try to play VF games and usually get tired of them...I don't find them as fun as other fighters and thus never learn them. I want to get back into VF5, but it's pointless since Tekken 6 is hitting arcades here soon and everyone is going to be playing that. Still gonna get VF5 on 360 though. Hope the online is good!