I actually think going at it the way of Super Smash Bros. (and don't get me wrong, I love the game to death) wouldn't work. Basically, here's how I think it should work.

Take a 3D fighting engine that's a mix of Soul Calibur and some of the Street Fighter type games. A great deal of manueverability, but the moves should be simple. There should be enough to make things interesting and they should be decently easy to pull off, but not so utterly simple as to allow for little variation.

Let's take the equipment system Soul Calibur introduced and refine it. Just because this is going to be a fighting game doesn't mean we can't be heavy on the RPG elements.

Many Final Fantasy characters can use different types of weapons and armor. Many cannot. Make use of both of these.

Locke can use daggers, swords, and other such weapons. Let him have a wealth of all of them to choose from. You want a sword? Go for it. Want a dagger? That can be arranged.

Also, there are many ways to customize a character to have the kinds of stats you want. Final Fantasy VI had Espers, VII had materia, etc. etc.. This can easily be worked into the equipment and character building area.

For example, let's say I want to field my Onion Kid against my friend's Terra. I'm going to go over my Onion Kid and assuage the possible builds Terra can have and finally pick a Sage for a high magic build. We then move on to the button combinations where there are several combinations that I can set my moves (in this case spells) to. Then I'll move on to the items, where I can pick an assortment of equipment, robes, staves, rods, and the like. These further specialize my build.

Then we'll move on to Terra.

One of the major ways in Final Fantasy VI that you customize your character is through Espers. So in this game, we'll make it so that you can equip several Espers that give you certain stat boosts. So, say we want to give her a balanced build, we'll give her Starlet, Raiden and Tritoch (the game'd probably have inherent bonuses for all espers, and three would probably be the limit, although depending on how the game works there could be more or less).

We'll then go on to the moveset. Since it's balanced, about half on the magic and the reston offensive moves. This game would probably allow for some attacks like "Magic Sword" and the like, so we'd account for the fact that she could use her magic to enhance her attacks that'd be her special attacks.

Moving on to equipment, we could give her a good equipment set for magic and offense.

Then we'd take the super moves of both. For the Sage it'd probably be a lot of the higher level spells, and for Terra it could be things like her desperation attack, an Esper summon, or maybe even her Morph. Like with many Street Fighter fighting games, these moves would be accessible after charging a bar.

Given both of the builds, the characters should, if the game is made properly, be even in potential, but its up to the skill of the players and how carefully they construct their builds to decide who wins the match.

I'd love to see a game like this.