That's pretty much it right there - your standard 8-bit story. The game actually offers a couple little cut-scenes where pretty much nothing happens, but I didn't expect them so they were kind of nice. The story is nothing special but the game does have one to tell.
Karateka doesn't really have music. The short little start-up tune is the same as the victory tune when you beat an opponent, and is just six notes. Other than that there's the sound of punches and kicks which sound the same whether you're punching air or the opponent, and one more short little tune during the cut-scenes. It would really add to the experience if there were some sort of music to add tension during fights.
The graphics are a tad bit colorful, and look somewhat promising on the first fight, but you soon realize the old palette swap trick is a main component of Karateka. All the fighters look the same, and you only fight in two locations, which are outside and inside. I believe you are in a castle but it's just a black room with some random columns. The animation is slow and awkward at best.
The game consists of six fights with apparently the same fighter in different clothing. The only difference between fights is you have less health at the beginning of each new fight than you did at the beginning of the previous fight. The A.I. does not appear to change in any way. What really kills this game however, are the controls. Apparently Karateka plays much better with a keyboard, but playing it with the U.S. 7800 controller is extremely unintuitive. (The European 7800 controller more closely resembles an NES pad and I imagine works much better for this game.)
When you begin the game, you can either press the right trigger to enter a fighting stance or hold the left trigger while moving the directional stick to run. Should you run towards your opponent you will get kicked or punched in the face and be greeted with an instant game over. You must enter the fighting stance and then slowly approach your opponent. To punch upper body, you move the stick to the upper left, to punch mid-section move the stick to the left, to punch lower body move the stick to the lower left. Kicking functions the same but you move the stick to the right. Moving the stick to the left to punch an opponent on the right is about as unintuitive as it gets.
Whenever you back away from your opponent, you will both regain health, but because the gameplay is so slow, this tends to be annoying rather than strategically helpful. When you beat the opponent...nothing happens. Victory tune, they fall over, then nothing. You have to either scuttle slowly to the right or leave the fighting stance and run out the right side of the screen to get to the next fight. All that being said, I did have some fun with the controls once I figured them out and practiced them for a while, but they are too convoluted for a fighting game and the 7800 controller feels like it's going to break my wrist.
FINAL GRADE: F
If you're at all interested in Karateka, find a version that's not on the 7800. It would have done wonders if a multiplayer feature was added to make the 7800 version stand out, but still would not have made up for the unintuitive and convoluted control scheme.