Instructions
Defeat Luigi and Falco
Enter adventure mode playing as any of the default characters.
Complete the first stage with a time of xx:x2:xx; the variable times do not matter, but the second digit of the seconds column must be 2. To achieve this, when you reach the end of the stage, stand near its edge until the clock says xx:x0:xx, so by the time you rush forward, the clock will have 2 in the right place.
Defeat Luigi in under a minute. Once you do, you will be thrust back into adventure mode.
Complete the rest of adventure mode, and then defeat Luigi again. This will unlock him as a playable character.
Go to the game's Special Matches menu, and select and complete the 100-man melee, where you must defeat 100 very weak enemies in a single stage. Once you have completed this match, defeat Falco, and you will unlock both Falco and Pichu.
Complete Event 37
Enter the Special Events menu and select "Event%: Legendary Pokemon."
Select any of the default characters and start the match.
Defeat Jigglypuff and the four giant wire frame enemies. You will be given only pokeballs to work with as items. Once you complete the challenge, Pichu will challenge you. Unlock Pichu by defeating him.
Play as Mewtwo
Unlock the secret character Mewtwo, an evil Pokemon. You can unlock him by playing the game's "VS Mode" for at least 20 hours, at which point he will randomly challenge you. If you defeat him, you will unlock him. A good trick is to turn on the game and enter a "VS" match, and then simply leave the game idle overnight to accumulate the appropriate number of hours.
Enter adventure mode or classic mode and select Mewtwo at the character selection screen.
Complete adventure mode or classic mode all the way through with Mewtwo. Once either is completed, Pichu will challenge you. Defeat Pichu to unlock him.