I can use practically everyone except, for some reason, the original ten (minus Falcon), Pit, and Diddy. I can't actually decide on my favorite. It's a toss-up between Ike, who's insanely strong, and Snake, who's just fun. I really like Meta-Knight as well. Usually, I just use random. I rarely pick my own character.
The gamecube controller is much easier to use, both because I'm actually used to it and because it is much easier to throw items, which I do a lot. Why hold onto a HR bat that can't hit squat when you can just toss it at somebody?