No, he kills Ryu. The falcon thing brings him back to life as a "soldier of vengence" or some shit like that. I don't know, it's a Japanese legend or something. I had to look it up, myself...
But that brings up the fact that Ryu is actually a ninja
and a zombie. How many games have you played where you get to be a zombie ninja?
Bah, I think the gameplay is great. I mean, Ninja Gaiden has been the only game since Abe's Oddysee that has actually
challenged me to become better. I've only had two really "frustrating" experiences; one envolving the first band of spider ninjas that attack you, and the other being the cheap-ass Alma boss at the end of mission seven. Oh well, different strokes or something.
I would give it some more time if I were you (if you haven't taken it back already).