Good start, but needs a little more
You use the sprites very well, and the scenes are build very nicely, but I would suggest you try to improve on two small areas. One would be collateral sprites, like when someone hits the ground, you can get sprites of water or dirt clouds flying up.
The second suggestion would be the ending moves. Instead of a little twister, make it something big, the nail in the coffin. Shadow and Sonic roll through each of the brothers leaving cannonball shaped holes in their chest or the Mario brothers get Yoshi to come eat Shadow and Sonic - something more... final.
All in all though, it is a solid foundation for a flash, you have talent. Good luck on any future movies. Also, as a side commentary to this review when I reread it, it sounds like some asshole judge on a reality show - sorry.