Master Chief:
Probably one of the best guys for fighting the AI. Fight from above with this guy, and spam the heck out of Battle Rifle, which is very energy efficient. Use his Plasma Grenade if ever you get stuck on the same square for some sure fire damage.

Fulgore:
A solid character with moves that have a good range. His best opener is to move up, right, and attack with Heavy Metal. Make good use of Red Death and System Surge for chipping. Only use Spark Storm when you have to.

Sephiroth:
This guy is best when fighting from below. His best opener is to head down, right, and attack with either a Limit Break or Shock Nova. You'll want to chip with Shock Nova and Shadow Flare, while using Heartless Angel (is his most energy efficient move) as a secondary attack.

Scorpion:
Scorpion is a balanced fighter with low energy cost moves. His best openers are to to head up, right, and cast Flaming Skull. Or, move right, cast Hell Beast, and pull back.

Sorceress:
She is best when attacking from the center and is a defensive character, with high energy cost attacks. Her best starter is to move either up or down, move right, and cast Blizzard. Try to stay around the center with her.

Jaguar:
Very balanced character. You'll want to make good use of his Jaguar Leap for main damage dealing.

Metal Sonic:
Another balanced character. Star Destroyer is the key with him. Stay low, and fire this one off when you get in a good position. It has a high energy cost though, so time the attack well.

Evil Ryu:
Relatively versatile due to having the best chipping move with the Hurricane Kick.

Stone Cold Steve Austin:
Stay low with this guy. Screaming Skull and TLC both hit high with fairly high efficiency. You'll want to chip with those, and hit the stunner for the kill.

Illidan:
Very deadly character with the best finisher in the game. You'll want to stay high and use it when the time is right. Just don't get stuck with the enemy facing you horizontally...