Super Smash Brothes: Squaresoft style

I always thought it would be sweet if they could do something of that nature. I don't think they have tried anything like it. If you dont know what Super Smash Brothers is, it is a nintendo game where they throw all the "best" heroes together from their games (the ones they own) and turn it into a fighting game. It is great fun, but I wanted to know what you guys think would work for this... please give some good ideas, like a character,(hero or villain) what items/ level that could go with em, and perhaps some moves that they would have...

Some items that i think could drop during the game are:
Potion: heal you of course
X/Hi Potionl: better healing

Ouch, i gtg right now! I will post alot more ideas later...
nothing like this has been done has it?