My favorite topic.
First, Lil Mac is a SHOE IN. He has a strong western following, a long history and is considered a legendary retro character amongst fans. With Punch Out finally having got a new game on the Wii and considering it's success, it's only plausible to add a character from the series and who's better to go than Lil Mac. He'd also serve as a realistic character and represents a real world martial art. (Boxing) I personally feel Mac is the best representative for that case and Smash only has Snake and his CQC.
Then I'd consider adding more characters to a series already represented. Looking at the roster, it's very evident that despite deserving of more due to popularity Wario, Metroid and F-Zero have only one characters.
For Wario, it's an odd case. It's definitely deserving of at least one character, but it'd either be from Wario Land (Captain Syrup) or Warioware (the various members). Thing about Captain Syrup is that while she has moveset potential (being a pirate and all) and that she finally appeared in Wario Land game again with Shake It! she wasn't even relevant in that one. She'd be a pretty obscure character despite making sense as a smash newcomer. Then there's the Warioware crew, while diverse, you have to be extremely creative to think of a moveset for any of them. The obvious choice would be Mona or Jimmy T, but 9-Volt and Ashley (why...) are extremely popular and demanded. But there's also Kat and Ana who not only are popular and important in the series, but also have the most moveset potential (the new Ice Climbers?) and even appeared in Brawl! If I were given the choice, since it's the point of this thread, I'd go with both Captain Syrup and Kat & Ana. (I'd have gone with Jimmy T but there's a reason why not and you'll find out below.)
For Metroid it's the obvious Ridley. I don't buy the size BS. Though, his body proportion and structure is the real problem, but I'm sure there's a way to make him. Metroid NEEDS a new character and there's no other choice. Except maybe SA-X but she's pretty much a cloned Samus like Dark Samus.
F-Zero, it's either Samurai Goroh or Black Shadow since F-Zero isn't big enough for two. The former being more recognizable and having more moveset potential while the latter for popularity and being the main antagonist. I'd go with Samurai Goroh personally because relevancy and importance (and I like him better. I main him in GX after all!) is better than popularity. I could also say screw them both and add Bio Rex or Deathborn!
I'd also consider adding characters from IPs that aren't represented. The first to come to my mind is Advance Wars. It's big enough and has a cult following (IS also expressed interest in making a new game in the series), and if Fire Emblem has representatives then AW definitely deserves one. Of course the obvious choices are Andy, Max or Sami. For selfishness and better moveset potential I'd go with Sami, but Andy is more important.
Next is Takamaru, a character from a popular game in Japan and the "retro" representative. Despite having no knowledge of his game, I'd add him because of the huge demand, his moveset potential as a samurai and because samurais are cool.
His theme is amazing as well!
Then there's Rhythm Heaven. The series is huge enough to get a representative one way or another, and though even if a stage is more appropriate, I wouldn't object to adding Karate Joe at all. He's not only appeared in all games in the series, but he's recognizable and has good moveset potential to boot. Plus, everyone loves him. (Especially Japan.)
And for selfish reason and a pretty much impossible character, I'd add Agent J from Elite Beat Agents or the leader from Ouendan. Now I don't know about you, but having an elite beat agent/male cheerleader fight in Smash with their crazy dance/cheerleading moves is something I dream about every day (and the reason why I don't consider Jimmy T. even though he'd do the same.) Also, EBA is awesome (and so is Ouendan). Everyone should play and everyone should know about it. No better way to do that than with Smash! I'd add both Agent J/Leader in the game and have them as alt costumes depending on people preferences. (In the west, the default would be J, and in asia it's the leader.)
Oh, and since there's huge demand for him and for the sake of adding a 10th character, I'd add K.Rool I guess. I'd much prefer a different Donkey Kong Country representative but eh.
That wraps it up
1. Lil Mac (Punch Out)
2. Captain Syrup (Wario Land)
3. Kat & Ana (Warioware)
4. Ridley (Metroid)
5. Samurai Goroh (F-Zero)
6. Sami (Advance Wars)
7. Takamaru (Nazo no Murasame Jo)
8. Karate Joe (Rhythm Heaven)
9. Agent J/Leader (Elite Beat Agents/Ouendan)
10. King K.Rool (Dixie is better. Funky is better. Tikis are better.)
I'd also keep Snake and Sonic in by the way. I wouldn't cut anyone from the roster.