So here's what "Fists of Justice" currently looks like (now with people throwing!):
Really, what I currently have is a beat em up game engine with some cool features like customizable characters. The fighting system now has a "weak" and a "strong" attack. The weak attack is faster, but does less damage than the strong attack, which is slower and more likely to be blocked. In order to guarentee that strong attacks connect, the player must first hit an opponent with weak attacks to lower their defenses. It's actually a more complex system than what is seen in alot of beat em ups, where attacking is usually using only one button. The player can actually perform combos by mixing up the weak and strong attacks, but performing a full combo is only a good idea when the player is not surrounded by 3+ enemies.
There's also the guard system, which requires the player to block right when an opponent's attack connects, rather than just holding down the guard. One thing I'm going to add is a sort-of "Spider-sense", which gives a graphical indication to the player when an opponent is going to attack, so that they have a chance to block it. I have about average reaction time, and by the time I press guard after seeing an opponents attack coming, my character has already been punched in the face. Some sort of warning is necessary for this system to work.
I'm also going to be writing up a design document, which I should have done in the first place. It really is important, especially considering that I've rewritten the fighting system three times due to a lack of direction.
On an unrelated topic, I wanted to recommend a game for the Playstation 3. It's called Valkyria Chronicles, and it is an amazing turn based strategy game. It's actually a mix between an RPG, a turn based strategy game, and a third person action game. The demo is up on the Playstation Network, and it is definetly worth a try if you're at all a fan of strategy games. The game has apparently sold very poorly here, which is quite a shame because it's a very good game.
I like the idea of the warning system. Even just having a character flash in some way or another might be a good indicator.
Sounds fun, though...I'm looking forward to playing it :)