So yesterday my roommate and I played with XNA.
He did the drawings, and a couple sounds and I did all of the programming.
Here's what it looks like, fully functional (the hit boxes could use some modification)
Once I get the code cleaned up and I talk it over with my roommate, we'll see about releasing everything in it open source.
Sounds
Character Actions(jumps,running,flips)
XBox 360 Controllers, 2 player
Health Bars
Sprite Animation
Who doesn't like Ninja stick fighters?