First post on these forums (yay!)
I got the vita and mk the day it came out. Online is really impressive, and very few combos get dropped. Sometimes there's a bit of a mishap, and etc. but really good for a wireless. Even with only one bar, it's pretty rare to get serious lag.
I have no idea how the matching works in online. It just gets you to someone, and you see his/her stats. From there, you can turn down if you want to. Personally, I turn down any one with a 2:1 win ratio (I'm not that good). I have a 8:9 ratio right now, and i still get matched to people with 160:30, so I don't think it matches by stats. it's just hit or miss imo.
Private matches work this way: You create the match and send an invite to your friends. Then you have to sit there with the loading screen and wait until they accept. if they don't, i don't think you get notified... (i know I don't). At least you can use the messenger to pester them if anything.
Just giving the basic run through of how it works if anyone's interested.
Also, voice chat is great, but there's no way to tell if someone's muted their mic or are just quiet. Also, can anyone tell me if a person who mutes their mic can still hear you?
Now as for why it's better, I think it's just because there's less players? I sometimes get matched to the same person twice or so, and very few people have played more than 100 online games.