I love the series, you amazing guy! =D
I loved the little clip that made fun of Ken's hadoken, it was very funny XD
I think you are extraordinarily clever and talented using flash and sprites. The life bars at the top is a factor that other sprite/flash creators don't use, andin other fighting flashes, it seems like the guy who gets pummelled the most wins. The animation in this is smooth, and I think the music is great.
The use of combos in this movie is quite smart, and reminds me of Marvel VS Capcom 2, a game of cross-overs, switch-combos, and a lot of air techniques =P
Overall, this was a pleasure to watch (more than once, in fact), and I look forward to CVS Battle Royale 5; I prefer Capcom (SF in particular) over SNK, so I hope Ken wins ;)
One suggestion I have is that the battling is a bit more balanced: the fighting is usually one-sided for a bit, then the opposing side blocks one, and hits the other person 100 times over again. Perhaps you could consider some 1 or 2 hits in between per fighter, possibly with some more dodge/blocks?