Guilty Gear X2 uses a small amount of colors and ends up looking really nice. They're also really large-scale, however.
Arcana Heart doesn't look like it uses a very large amount of colors, either. I wouldn't know; I haven't played it yet.
Samurai Shodowns 3-6 also don't use a huge amount of colors, and those look amazing.
Last Blade.
Power Instinct: Matrimelee.
Real Bout Fatal Fury.
Garou. Uses I think LESS colors than KOF, and has beautiful animation.
Notice how only two of the games I've mentioned aren't from SNK?
EDIT: Oh, and Street Fighter III. Obviously.
Arcana Heart doesn't look like it uses a very large amount of colors, either. I wouldn't know; I haven't played it yet.
Samurai Shodowns 3-6 also don't use a huge amount of colors, and those look amazing.
Last Blade.
Power Instinct: Matrimelee.
Real Bout Fatal Fury.
Garou. Uses I think LESS colors than KOF, and has beautiful animation.
Notice how only two of the games I've mentioned aren't from SNK?
EDIT: Oh, and Street Fighter III. Obviously.