I'd love to see Geno or Mallow enter the ring. I know these two were created by Square-Enix, but they were in a Mario game, so I think Nintendo holds the rights for them.
Also, I'd like to see Fawful (This battle will the the MUSTARD OF YOUR DOOM!). Hey, a guy can dream, right?
As for third part persons, I shall analyze them by company-
Sega
Home of Sonic the Hedgehog, one-time rival of Mario. The coolness factor alone makes a choice from this company popular amongst fanboys.
Odds: Pretty damn good for Sonic. Every one of his buddies (save Knuckles) doesn't have a chance.
Ubi Soft
Rayman is the most popular guy in this house, and probably the only one Nintendo would consider. However, Jade from Beyond Good and Evil would kick so much ass...
Odds: Rayman, with his status on the Wii, has a semi-good chance. Not as good as Sonic, but good. Jade would be considered a "dark horse".
EA
NONONONONO.
Odds: God help me, the first one of you to suggest "Harry Potter" gets to live with Jack Thompson.
Square-Enix
Final Fantasy is a juggernaut in the gaming world, but only FFs before 7 are included. Kingdom Hearts also has a chance (Chain of Memories!)
Odds: FF6 has the best shot of getting in this game, but SE can decide which one charcter for the game. Sora is the "dark horse" from this company.
Konami
They already got Snake in here. Who else is left?
Odds: If its Raiden, there will be hell to pay. Else, look at the Big Boss, Liquid, or Robo Ninja! SNAKE! FIRE THE STINGER!
Namco/Natsume (Combined for efficency)
Seeing as how Namco's pride and joy is the antithesis of SSB-style play (Tekken & Soul Calibur), they'd send in someone from Tales of Symphonia. Natsume could use Jack(The Player-Character) from the Harvest Moon series.
Odds: Both companies don't really have much of a chance here. Unless Harvest Moon starts selling like hotcakes....
Capcom
The house that Mega Man built. This company has THREE fanchises to choose from:
-Resident Evil (Chris Redfield or Leon Kennedy)
-Viewtiful Joe (Joe)
-Mega Man (Mega Man, X, or Zero)
Odds: Capcom knows people will bitch if Mega Man.exe gets in, so its probably X or the original Mega Man.
Odds favor Sonic and Mega Man. No fan boy rants-please?