This game is too difficult!
Yes, it is. The American and European versions of this game are the hardest versions of Street Fighter ever, with the CPU opponents cheating to ridiculous and never seen before levels. Guile doing a sonic boom whilst walking towards you, Dee Jay getting every single hyper fist hit in, everyone being able to do far more damage than they should, the list goes on. In comparison, the Japanese version isn't anywhere near as difficult, and many of the console versions of the game have greatly toned down A.I.
Why the game was made so tough is another matter. I can only assume Capcom saw that SNK's games released in 1994 featured notoriously cheap A.I. (go and play Art of Fighting 2 and you'll soon see what I mean) and they wanted in on that. It didn't go down well with players though and no Street Fighter game has featured such cheating A.I. since.
Are there any differences between the Japanese and American versions?
There are several, this game had the most amount of regional differences of all the versions of Street Fighter II available. The Japanese version has a different title -Super Street Fighter II X -but it also has other differences, such as Akuma (Gouki in Japan) having win quotes and other dialogue. Click here for more info.