I *highly* doubt that is the case. Where did you hear this from? It's probably one of those "April fools" joke... remember "Sheng Long", the supposed secret character in Street Fighter 2 (the original)? Supposedly you could fight him if you could manage a tie for 10 rounds fighting M. Bison.
At the title screen, press Right, Left, Down, Up, Right, Left, Down, Up. You should hear a sound to confirm the code. Now start the game and you should have six more fighters.
submitted by Michael Medlin and SmurphyYEA"
"Unlock all characters except the final boss (Japanese Version)
At the title screen press: Right, Left, Down, Up, Right, Left, Down, Up. If done correctly you will hear a sound. Then press triagle 9 times and X 11 times after that you will hear the same sound.
submitted by boo"
yep, vegetto is there, as for gotenks, i also heard of such tip, i don't if it is true cos at the time i was still playing with psemupro and with no savestates i wold have to spend much time to beat the game 9 times ...and because the emu was kind of unstable sometimes it blocked and i gave up (assuming that if you saved to the memcard the 'cheat' wouldn't work) anyone care to give it a try in the current epsxe???