I want to clarify that while I think that the hit detection is horrible in Karate Champ for the NES, I still enjoy the game a great deal. There is something about landing cheap front kicks or jumping side kicks right after the ref calls "begin" that delights my heart to no end. I don't think I could tolerate a game with hit detection like that being made today, BUT I can make an exception for Karate Champ. The world is a profoundly better place for having Karate Champ on the NES.
The iPod version is, actually, pretty kickass, by the way. I play both that and the NES version.