More ideas
Chibi Robo
This little guy has a lot of capabilities, which could be changed into attacks. Attack with his plug could be the standard A hit. For B moves, it could have the Chibi-Copter as a save-the-life move as well as hitting others with the blades. The Chibi-Blaster could be used in the sort of way Samus used his Charge Beam. The Squirter could hit and push opponents away. And for a little finishing touch, if Brawl will keep the pose move when you press up on the D-Pad, Chibi could do his Drake Redcrest pose.
Pikmin arena
A lot of posters have suggested Captain Olimar. I agree with that idea, but what about a Pikmin map? All the crates/barrels would be replaced by Pikmin pallets, the spaceship and the onions randomly flying above, and maybe even have the arena change, like the SSBM Pokemon Stadium. One moment, you're fighting in the Impact Site, with clams biting onto your feet to slow you down, when suddenly it changes to Forest Naval, with jets of steam shooting you up.