Here, I demonstrate a few things.
1) Basic movement
2) Guard (standing guard blocks mid, high, overhead attacks, crouching guard blocks low, mid attacks and high attacks generally whiff)
3) Skills
4) Vitality
Instead of watching the below video, I recommend watching the Youtube version with far better quality, so you can actually follow what's going on.
Now, when two units are adjacent to each other, there is the option to Engage, entering the below-demonstrated 1v1 Mode (albeit with Placeholder characters made by the ever-talented M.U.G.E.N. sprite designer Warusaki3 and originating from Capcom vs. SNK 2).
Floyd = Kyo Kusanagi
Mert = Zangief
Kirin = Vice
Han = Yun Lee
The second video is a M.U.G.E.N. demo, visualizing the 1v1 Mode. The final version requires:
1) The actual characters (instead of placeholders)
2) Guard/Rush/Vitality meter
3) Original stages
M.U.G.E.N. itself has an application called FighterFactory, which allows you to create and customize your own sprites. Using this app, I'll create Floyd's sprites and moveset.