Wait for the character profile screen, when it comes up press: Z, A, Right (on D-Pad), Z, A, B. If you did it right you will here a laugh. Find him on the character select wheel.
You can enter the Sky Stage when your in two player mode. Have both players select their character then before the press start push Down, and Medium Kick. Now after one person wins, don't let the other person continue (unless you really want to) and you will fight the CPU in the Sky Stage.
Beat the hard Training Level.
Press Up and Start at the Character Select Screen.
Choose "Team" or "Team Elimination", select the number of fighters you want then press DOWN and START. You should see a "?" instead of your fighters face. You must be a versatile player. You will not know who your next fighter will be once your first fighter gets "eliminated".