I personally think it's pretty good. They added little elements to the characters backstories to tie them together with other characters emotionally. There's also more explanation to things like powers and abilities, and generally, a more tight, streamlined concept of who each character is and what their personalities are like.
Some of these new bits of information are pretty brilliant, and help re-defign the characters by defining them further.
My one problem is, it seems, that for how much setup there is to the characters/story/situations, the ending for story mode seems more or less abrupt, and sorta anti-climactic, though to be fair nobody knows exactly what happens. However, judging just from the dialogue, and the shear epicness and length of it, it's going to be the best story mode a fighting game has ever had.
Individual character endings are pretty great. Everyone's going to have their favorites/least favorites, but they're all pretty good. My particular favorite being Smoke's, because it reveals a lot about his character, mostly stuff we've never heard before. The bios are equally revealing and well-made, elaborating on old characters in ways that make them seem new and fresh and more emotionally grounded in reality, while simultaneously not changing anything.
Over all, really good, and I can't think of a fighting game with a better overall story presented in-game.