A Final Fantasy character theme compo would be interesting, however I think their are a lot of characters that don't have themes for one reason or another and may have to deliberate on what constitutes as a character theme. The NES/Famicom FF's don't really have character themes and may become left out as well as the MMO one's.
Undoubtedly; as I said, there's really only enough character themes to allow for maybe
two compos of that, for that very reason. Although I suppose you could open it up to tracks that remixers can make convincing arguments are associated strongly enough with the characters being used as their theme (similar to how Mirby's allowing tracks strongly associated with the Cid of each game in the Cid project, even if there's not necessarily an explicit theme for every Cid).
I like the idea of a Pokemon challenge too (heck, anything main series Pokemon music-wise is pretty okay with me), and had thought of suggesting it... but the only thing I could come up with that might work for it would be for each remixer to choose a gym leader for a "Gym Leader Tourney" and then to use the music for their town as their theme. (I.E. Whoever chose Misty would be using one of the four variations of Cerulean City's music, and if they went up against "Brock" would remix with one of the four versions of Pewter City's music, similar to the Grand Master compo.)
EDIT: Had a stray thought for another compo format, one that would deviate from the "A v B" format. You could have a compo run in "Episodes," (similar to the way MindWanderer is running RWTS) and at the beginning of each episode the participating remixers would be given three sources, and asked to choose two of them to remix into one cohesive, fully working track. You'd still get plenty of variety - one round with sources A, B, and C might end up with submissions of CA, CA, AB, AC, BA, BC, and CB, for instance - and if you wanted to get really challenging, you might give the the participants a style, mood, or sound restriction that's different each episode. For instance, you could give the participants a fanfare source, a quirky happy source, and an ambient source, and ask that the finalized remix be done to achieve the mood of "gloomy," or contain at least two sections with a flute. Of course, you could just provide the sources and let the participants do with them as they pleased, and see what comes of it. But it'd be an interesting way to see how sources from various OSTs could work together, or not - you could provide a source from Halo 3, a source from Super Mario Brothers 2, and a source from Final Fantasy Tactics, and see what people can make out of them.