Awesome!
I'm enjoying the series--this is what I'd hoped for. There's a good plot coming along, the fight scenes are spectacular and the animation's crisp and well-timed, and then there's the fact that Mario and Sonic are teamed up (I got tired of seeing all the Mario vs. Sonic stuff--about time for a change!) and it has a definite Dragonball Z flavor to the whole ordeal.
You've taken a few of my favorite things, stuffed them into a blender, hit "liquefy", poured it into a mug, and stuck it in a fridge--this series is cool, smooth, and satisfying. Plus, it has fewer carbs than Coors' Light.
Of course, there's always a little room for improvement (read: here comes the constructive criticism!). I agree with FengShuiMan that there needs to be a little bit of variety when the "Power Attack" flash appears--I can pretty much guarantee that your audience will start to say something along the lines of, "Oh, here comes yet another Power Backhand-slap-to-the-face," after a while. What I like best about your fight scenes is that they're so unpredictable--by changing up the type of attack rather than using the flash to signal a power hit, you will maintain that unpredictability, keep your audience entertained LONGER, and you'll have no problems reeling people in to watch the episodes the longer the series gets.
The only other thing that looked off in this particular episode alone was the Emerald Radar. With all the characters pixelated, it seemed a bit awkward when Mario was holding it in his hands, but that's usually true when it comes to drawn objects being used in a sprite Flash--it breaks a bit of the illusion and setting that the sprite movie creates: it is a video game.
Other than that, AWESOME series. Keep up the good work, man!
Voitman 
The Burly-Brawl: Reloaded 
Say Dammit! 
Super Mario bros Z ep 4 (old series) 
Mario Fun Shorts 
Megaman Tribute (Xcyper33 
Ninjagamers2 
DDR Collab 
Fett's Vette 