Well I have done quite a bit more work on the game lately, particles are now scriptable per character so Scorp/Sub can make you bleed while Street Fighter characters have the 'color particle explosion' effect.
I also decided on a single skeleton to be used for every character so now each character can have their own unique throws/moves and apply the reaction animation to the enemy, if your character is too big/small/has weird limbs he will be classed 'unthrowable' (think old school bosses)
The engine is coming along nicely, Sub Zero and Scorpion are 100% playable and their moves work nicely, Sub can freeze you and Scorps spear is 100% working and his teleport punch works nicely also.
We also need some more artists to come and do some extra characters so if anyone is interested in putting in some work come to #a-shock on EFNET.
Official Site: http://aftershock.xbox-scene.com