well, you're right about that, and i'm on the road of creating my own character but mugen is made in C using allegro and is in everyword...a 2-D fighting game engine. people have already made characters from most of the good 2-d games including guilty gear. the only strain you'll probably have is just locating characters that you would actually want in the game. it took me 3 days to find all the SF3 (Street Fighter 3) characters and implement them in the game with their own stages and music to match. you can start at mugen fury (search through google.) and then use esnips.com to locate most of the other charcters. music will come easy and you should take the time to find a better screenpack if you're stuck with a small roster.(mine holds 534 chars...heh heh...)
to end this rant, i might upload my mugen soon, i'll post here for download.
[tekmonkey is now on a banana break...]