For now all I am doing is collecting sprites, coming up with ideas, and trying to learn MUGEN. Once I familiarize myself enough I'll actually be starting on my game. Right now it's just breaking things down.
Shang Tsung
Special Moves:
Single Flaming Skull
Double Flaming Skull
Triple Flaming Skull

Quadruple Flaming Skull

Rising Flame Skulls

Health Drain

Fatalities:
Soul Steal

Inner Ear

Ermac Who?

Basically he morphs into Ermac, and slams the opponent into the spikes again and again.
Before each match, Shang Tsung starts out as his old self. While the announcer is initiating the fight, he will morph into his younger self. Why? Because I like the idea and it will give the player an extra something to look at. He's "powering up" before the round in a sense.

After a round that ShangTsung loses, as he falls he will morph back into his old self. Because he lost, I suppose it shows a sign of him becoming weaker... I suppose the MKA intro movie inspired this idea. The morphing animation will not happen everytime he is knocked down however. Nor will it happen if a fatality is performed on Shang (for obvious reasons).

ShangTsung morphs into his old self during his quadruple fireballs because I wanted to make it seem like shooting that many fireballs at once would drain his energy and because I wanted to give it a different effect. I am not sure which sprite position I should give Shang Tsung for his 1-3 fireballs (with the Knee up to resemble MK3 Shang or just leave it as is).
Please feel free to give me your thoughts and give your reasons. Afterall when (and if - hopefuly not too long) I get this game released (full version or not) you all and the other members of the MUGEN community are going to be testing/playing it hopefuly. I know my morph sprites are a little crude... I'll probably work on those more when I actually start making my characters and building up the game.
The only thing really slowing my progress down is the fact I am in college and computer science is never easy. This summer I will definitely get cracking on my project. By then I should have more to show you than just concept "fake pictures." Thanks again.
Skarlet
Special Moves:
Boomerang Throw
Air Boomerang Throw

Back Flip Kick
Teleport Kick
Ground Roll

Star Blade & High/Low attack

Fatalities:??????? I have no idea yet!!!
Because I am remaking MK3 and not UMK3, I didn't bother putting in Mileena/Kitana/Jade. Rather, I put in Skarlet who adapts some moves from each of those 3 women (like Khameleon but not as boring).