are the characters purposely darkened or is that an artifact of it being resized and reformatted for the post?
I really like it.
They are purposely darkened. I want them to be faded and less dominate in the design.
The idea isnt bad, dunno about combining MK and SF characters though very different styles. You need to clean up the character art they will look awful printed. You cant just blow up a 72dpi image and then paint over the jaggies. I think you need some kinda background on there as your CP seems to be working at 4 depths.....but you only have 3.
My £0.02
I wanted some different fighting game characters. If there was more vector files of other fighting characters I would throw them in there as well.
What do you mean clean up the character art? I think you're talking about the SF characters. They are vector files so they are not pixelated at full resolution. They do look "hand drawn" and don't have very much detail but I'm ok with that. Kinda adds a homemade feel to it.
I do want to add a grid background similar to what pixelhugger has on some of his designs but I don't know how to make such a thing in photoshop. I know there is a tutorial on here somewhere about making grids in photoshop but it doesn't look anything like pixelhugger's.
My $0.02: you may want to reconsider Wolverines placement. My first reaction was to notice his "spinner".
Unless that will be a trackball, in which case it may be a little less suggestive, I'm not really sure.
It is a trackball. So it shouldn't be too suggestive. I can try putting a white circle in there to see how it would look.
Just noticed that!!! looks like the MK characters are backin some "bulge" to 
I already moved the joystick/buttons sections and the player 1/2 buttons up so its more appropriately placed.