How to beat I-No:
1)Go chip
2)Avoid annoying ball attacks - One you just have to go to the end of the screen and crouch, another you crouch in the middle of the screen and then slowly move as the attack moves, and for the hardest one, go right up to her then tripple-jump (If you are chip, that is. Every other character, with the exception of Justice who you unlock way later, can only double jump)
3) Charge special bar
4) When it's pretty high, corner her and then press all the buttons at once, putting you into instant kill mode, and then 2xQuater-circle... something (On the PS2 pad it's O, but i don't know about the X-Box). She usually walks right into it.
Alternatively, keep playing survival or story until you unlock SP mode for a character you are good with, select them with start to get dark mode (with an unlimited special bar) and then spam her with overdrives. Or just practice a lot for 4 - 6 months and get really good.