At the copyright screen, press X, right, down. You can tell if the code has worked when Natsuki appears, as she'll be wearing a red gi instead of the usual white one in the intro. Option II will have been added to the main menu, you can find it by highlighting story and pressing left.

The second options screen contains the following extra options:

Gauge:
Life: If set to off, this will make the life gauges invisible.
Damage: This will make the stun gauges invisible when set to off.

Attack:
Normal Attack: When set to off, this disables punches and kicks.
Hyper Attack: When set to off, this disables special moves and hyper combos.

This code also adds three additional characters: Natsuki 2, Rina 2 and Kandori 2. These characters have the same moves as their regular versions, but they wear different outfits. They can be used in the VS Battle, Hyaku and Edit modes. The code also adds Kocho to the character select screen, but he can't be picked -if you try, a message is displayed stating he can't be used.

If you do not move your character at all for about 20 seconds, they will transform into a chibi version of themselves, and taunt the opponent. If you then move your character, or if the opponent attacks them, they'll change back to their regular selves.

Natsuki

Rina

Kandori

Yanagisawa

Hondo

Bigaro

Tsuguo

Endo

Natsuki 2

Rina 2

Kandori 2