Nice start.
With work, this flash game could really cook. Right now it's fun and the play is prime... but the graphics and interface could use some work. It looks nice, but it is generic. Not to mention, maybe a story or at least some flair to how the tournament works (something like a VS screen) could really make this thing shine. Character select, maybe, with a few different characters? I understand this would take a copious amount of time, but this seems like the next logical step since the initial coding is done.