At this point, I don’t know of a way to make Capcom fighter sprites less pixelated in full screen. The sprites from such games as the Street Fighter III, Street Fighter Zero/Alpha, Jojo series, as well as the Darkstalkers/Vampire and Marvel VS Capcom 1 sprites that were reused in Marvel VS Capcom 2, came from the CPS II and CPS III arcade machines, which had a resolution of 384X224. The Capcom VS SNK sprites have a resolution of 320X240. This was sufficient for old TV screens with "brick-stack" phosphor array, which is what most arcade cabinets running Capcom 2D fighters have, but it's definately not enough for your computer's monitor, with the lowest mode of 640X480. This issue is basically what drove the development of video filters and enhancers (a.i. scanlines, scalers) for emulators of old videogame systems. The 3D Backgrounds in CVS2 and MVS 2 will obviously look fine, since they are resolution-independent vector polygons. The sprites, on the other hand, are tiny fixed-resolution pixel-pushed art, so they will get ugly and pixelated once resized (especially if their aspect ratio is changed). Right now, the only 2D fighter with a resolution high enough to perfectly fill the computer screen (without the involvement of video filters) is Guilty Gear X.
As for the Capcom fighters, unless, you manually size the window to the native resolution of sprites' games of origin, which is quite difficult, (I tried), or write a Chankast video plug-in that would allow setting custom resolution, your stuck with ugly sprites. Of course, there's always mildew’s method

. He once recommended using it with JNES, (I think) and after that, nothing else seems good anymore! Ah the stockings… Is there anything they can't do? I mean: they make women more attractive, armed robbers less identifiable, and Capcom sprites less pixelated; what more could you ask for? Is my writing getting needlessly lengthy and lame? Well, of course it does! Look at the time this reply was posted at; it’s almost morning and I'm sleepless and I can't think straigh~~~Zzzzzz, zzzzz, zzzzz.
P.S. does anyone here know if there really is a Chankast video plug-in that allows setting custom resolution? I really need it for clean sprite ripping.
Thanx