I've been following the MugenChina team since 2007 I think on their progress on King of Fighters Zillion. They've already managed to put in more or less 30 characters to their roster, among which favorites such as Kyo, Iori and Athena.
What I'm really excited for them is their ability to convert other characters into the KOF 96-XI standard sprites that we love. Some characters where given different modes to correspond to different movesets and character sprites matching those, like Terry in Garou and Fatal Fury costumes. Some characters were converted from 3D like Alba Meira and Another K'Dash from KOF Maximum Impact. Some striker characters were given full movesets like Syo Kirishima (the Kyo prototype) while Iori was redrawn with Another Iori sprites. Some others were redrawn to fit with the 96-XI sprite sets like Iori from XII and Miu from KOF EX2.
Another thing special with this Mugen team is they are able to put up fresh characters without having to chop up other character sprites (making other character edits too Frankensteinish). Although one did get in the roster, yes I'm looking at you Mika with some of Vanessa's missing body parts. Below are original characters from the Mugen China team:
Sima Li
Janny Tang
Unnamed New girl
(looks like a round girl watchathink?)
Visit Mugen China to download the game. Yes, it's in Chinese, you can Google translate it if you want but don't expect smooth Engrish out there.
Link: MugenChina
Photos by: Jackie Kaisami and LMN360