There are multiple PvP areas in SMBO, with varying engagement types. Each playable character has their own ways of being superior in PvP, although there is definitely imbalance among the characters. There have been two PvP tournaments up to date in SMBO; one featuring a custom PvP arena, and one using the MK arena hosted by the player Ace in a minigame triathlon.
Notes on PvP:
-Your name and level do not show up while in a PvP arena, making it easy to hide behind objects.
-When dying in PvP, you lose 15% of your current EXP and the person who killed you gains that lost 15%
-When killing a player in PvP who isn't a PKer (Player Killer), you will be tagged with a red name and other players can attack you outside of a PvP arena. You cannot attack them while being tagged as a PKer, and dying even outside of the PvP arena will return you to your last spawn point and the EXP exchange will still apply
-Debuff skills only work in PvP
-You cannot attack people who are in the same group as you in PvP. The ability to heal other people in the same group during PvP is unknown.
-Special Attacks are far more effective than normal attacks because lag makes it hard to land basic attacks, and special attacks will always land, even with lag as long as the target is within your range.
-Close Call's 20% revival effects are negated in PvP arenas, but Life Shrooms will still revive players in PvP
-Ranged weapons never run out of ammo in PvP
Mushroom Plains Arena
This arena is the first one you can access and can be accessed without any special badges. It features a very crowded, tree-dense area for players to hide behind. This arena best favors AoE skills where you do not have to target the opponent to still deal damage to them. This arena also is very hard to deal with considering lag and the vast amount of trees players can hide behind, resulting in very long PvP matches.
Dry Bones Desert Arena
This arena is far more open than the Mushroom Plains one, and hosts ledges for height engagements. There are very few obstacles to hide behind, but there are secret pipes that are not visible but will teleport the player who goes through them across the arena. This arena favors longer range special attacks such as Waluigi's and Wario's because of the large cliffs which special attacks can damage through. However, the secret pipes can help players avoid special attacks and force the opponent to chase them. Basic attacks are much easier to land in this arena because of its open space and lack of obstructing objects.
Mushroom Kingdom Arena
This arena has varying heights like the Desert Arena, more obstacles than the Desert Arena (but less than the Plains Arena), and has the new gimmick of ledges you can jump onto. Large range special attacks gain a particularly strong advantage with the increased number of obstacles, the cliffs that can only be accessed by jumping on, and the ledges which players can also walk onto. Also, PvP Goombas are spead throughout this arena, hosting high defense but minimal attack. High HP characters also have an advantage in this arena due to the Goombas harassing players.
Bean Bean Kingdom Arena
This arena is the most open arena of all, and hosts a slightly smaller size than most other arenas as well. There are very few obstacles, some bridges for narrow path engagements which make basic attacks easier to land, and a very level playing field. This arena does not favor any particular character or attack type, and basic attacks, special attacks, and pretty much any form of offense is viable. This PvP arena is probably the best suited for a fair PvP match.
PvP Tournament Arena
This arena was introduced in the official PvP tournament which was held after the release of the Mushroom Kingdom but before the release of Shy Guy Caves. The arena was made using the same graphics as the Mushroom Kingdom, and players could only enter the arena via an Administrator teleporting them into it. Both players started on the opposite sides on ledges which they jumped off of, and the arena had a large spectating area with a very small actual fighting area. The arena is rectangular shaped with a few trees spaced around, and holds dimensions on estimate of around 5x15 or so. When a player won, the winner and loser were teleported back into the spectating area automatically into special outlined boxes. One box was for winners, and the other for losers. This PvP arena has not been used since that tournament, and can only be accessed via Administrator teleporting.
Very Rough Tier List
Wario is by far the best character at PvP. With the strongest stat totals from equipment using Jdaster64's stat rating system, and the fact that Wario has high-range AoE skills, Wario can easily dominate even a double-team fight. His high attack power stacked with items, buffs, and/or certain badges such as Damage Up and Pity Flower can easily make him a 1-2 hit killer. It's also easy to land hits on enemies because his AoE skills have decent range and do not require targeting of the enemy. Most other characters must first try to lock on and target the enemy before they can start using specials, but Wario can just use his skills without targeting. His only weakness is his lack of running energy, making it very easy for characters who can outrange him such as Waluigi to play a hit-and-run style after they use up all of Wario's SP in a chase.
Yoshi has good stat totals and superb special attacks, as well as strong naturally acquired FP. Most of Yoshi's specials have high base damage and strong range, making Pity Flower a very viable badge to use with Yoshi. Yoshi's heal also has a good ratio of 6 FP cost for 7 HP, the only heal in the game with a higher than a 1.0 ratio of conversion. Yoshi's naturally acquired speed is also fairly decent, resulting in an occasional block and an easy chase game with lower speed characters such as Toad and Wario.
Waluigi is overall a weaker character in terms of stat totals, but his specials are very good for PvP. His slash specials have very high range and he can crit somewhat often with his naturally acquired stache, particularly when equipped with critical rush. Waluigi also has decent SP values to supplement his high ranged specials, although they lack in damage so he may need to land a few basic hits as well to finish off enemies. He also has his best weapon being ranged, which has infinite ammo in PvP. Waluigi's debuffs are also good for helping him survive, especially with his attack debuff greatly reducing the threat of glass cannons and Wario opponents.
Luigi has strong stat totals, but his special attacks are not at all outstanding. He does have a debuff on defense which can increase damage output, but for the most part his special attacks are very basic and host only average damage and range with moderate FP costs.
Mario has only decent stat totals and very average specal attacks, making him one of the worst characters in PvP. His naturally acquired SP and overall Speed is very useful, though, for creating chase games to tire out the opponent and then result in a similar hit-and-run strategy as Waluigi. However, Mario doesn't have a large ranged basic attack like Waluigi's Venus Fire Trap does, nor does he have outstanding specials. He can manage a few blocks though with his high speed, resulting in a lucky break against glass cannons who die quickly.
Toad has only a couple viable strategies, but those are overall very strong ones. However, just in general Toad is very weak due to its low stat totals and no outstanding abilities aside from his tanking capabilities and high naturally acquired HP. In PvP with multiple players, Toad can be a vital support character with his AoE heal, but in 1v1 there really is only one viable strategy for Toad, which is the uber-tank. If you have the patience to train 2 characters at one time and use party experience to bring your Toad up levels while only investing defense into him, you can easily attain an 80-85 defense Toad with moderate naturally acquired HP and pathetic attack. However, in PvP enemies will barely be able to dent you, especially with Toad's defense buff. When your opponent's guard is down, use Attack-Defense swap and rush your opponent to kill them in 1-2 hits. Overall this strategy is very viable and possibly one of the best because most players will hit 0 on you, and even if they do damage you it'll be in small numbers less than 10, where you have enough time to heal with your naturally acquired high HP. You can also buff your defense with Toad's special skills, and with items too. Taking advantage of lag, you can catch opponents off guard with Attack-Defense Swap. Unfortunately, while this strategy in itself is easily one of the top 3 in PvP, it takes lots of patience to train a Toad to only have stat points in defense.