My idea is that as much as possible will be done in an art package. Like each sprite sheet will be an entire character, and there'll be an overlay sheet to go with each character too, signifying the hot spots for every sprite - this will be edited in an art package, most likely edited as a seperate layer then saved out to .bmp. The easiest method and the cleanest is to use a set size of sprite, so the sprites will be on a grid, and then the engine will cut them out, analyse the overlay and put the required data in the array. Then it's a worry on how to animate, but really these games like a set frame rate (like 50 fps) so I'd use arrays for the animation loops too at a constant speed. So slower animations might use the same frames over and over, but it'd still be possible to have fast animations too because the frame rate is set.
Once the characters are on screen and can move about, it's a matter of handling the moves, which is not too difficult, and cross referencing the player and enemies overlays to check for collision and hits.
This is how I decided I'd do it when the original Street Fighter II arrived, and I haven't thought of an easier method yet

. It would be really cool to be able to add any character using just the sprite sheet and overlay (to make a mad Capcom Vs style game) - I suppose stringing the animations together will be the telling part.
I'm probably gonna nab the full sets from that site and see what I can do with them - the animation sets are manageable right now, but folk with more time should be able to adopt really smooth animation sets instead.
Van-B

Put those fiery biscuits away!