I basically agree with what SunSteam Paul said. I like the SMS version because it is technically impressive. While the artwork certainly isn't very faithful, the game play, for the most part, is. You can even move left and right and the objects will start to head in the opposite direction, just like all other versions.
I disagree with what Ceti-alpha said, though. The checkerboard background would have helped and the simple striped floor does make the PCE version look really weak, but I'd demand higher quality audio as well. The audio in the PCE version is SHIT. Space Harrier has great voice and especially music and it was all raped to hell by NEC Avenue driving in the wrong lane. I actually prefer the audio in the SMS version to the PCE version. The PCE version sounds like a broken AM radio in comparison (music, mainly). Yes, the PCE version has more voices, but they were sampled at 1/4-bit .00001hz. It's sandpaper to my ears. Still, I own it and enjoy it.