The Gizoid was found by Sonic, who "linked" to it and named it "Emerl" due to its connection to the chaos emeralds. In theory, Emerl is the most powerful character in the game. Based on how much you replay the game and/or fight characters, Emerl will learn the moves of all the other characters in the game. Once a move has been learned, you can set Emerl to use that particular move. So, Emerl's usefulness is going to be a result of which moves Emerl manages to learn. There are also special ultimate and combo moves that can be unlocked or acquired in certain parts of the game that also help make Emerl tough to handle.
Sonic is one of the fastest characters in the game, and has average attacks and defense. His healing and ichikoro gauge charging abilities are on the weak side, but his quickness makes him easy to use in a fight.
Tails has decent healing & ichikoro gauge charging abilities, average speed, can fly, above average defense, and has gadgets that help him out in a fight.
Only E-102 and Chaos are slower than Knuckles in this game. His attacks, defense, and healing abilities are decent, but his ichikoro gauge charging ability is one of the best. Timing is very important if using Knuckles and his special attacks will help immensely if you have trouble using him.
Shadow is the fastest character in the game and many of his attacks are powerful and his defense is decent. He has some of the worst healing and ichikoro gauge charging abilities. He is easy to use in a fight due to his quickness.
Rouge has average speed and attacks. She has the ability to hover in the air, which might prove useful for attacking from above. Her defense, healing, and ichikoro charging abilities are not very good.
Emerl's "Mom" and the new promoter of boxercising, Amy, is pretty quick and has decent attacks. Her healing is pretty good, too.
Cream is average in speed and mainly weak in attacks. Her healing and her ichikoro charging are some of the best in the game causing her special attacks to become your best friend when using her.
One of the slowest characters in the game, you can only play as E-102 outside of Story Mode after fighting against E-102 in Sonic's episode. Its attacks are usually powerful and its healing is one of the best. Whenever it is KOed, it explodes, which will cause a lot of damage to any opponent(s) within range--unless it is the KO that ends the battle in which case no one is harmed. The damage can be minimized by immediately pressing the control pad in the opposite direction that the character is blown toward (if the opponent isn't KOed by the explosion).
The slowest character in the game is Chaos. You can only play as Chaos outside of Story Mode after fighting against Chaos in Emerl's episode. Its attacks range from weak to powerful though is healing is one of the better ones. Its attacks do tend to have wide ranges and some have "hidden" effects that are beneficial.
Eggman is not a playable character in this game. He is just attempting to take over the world for the zillionth time and is responsible for finding the Gizoid (named "Emerl" by Sonic).
These robots were created by Eggman as a replacement for Emerl since Eggman couldn't get Emerl to work as intended at first. These robots look exactly like Emerl, but are gray-colored, and will have all the abilities of either Sonic, Tails, Knuckles, Shadow, Rouge, Amy, Cream, or E-102 when you face them. They are powered by chaos emerald shards.
These robots look exactly like E-102 and have all the same moves as E-102, but are gray-colored. Unlike E-102, these robots will not say anything to signify that they have been KOed and are about to explode. So, you must pay attention to their movement. These robots were created by Eggman, who has also sold them to people that use them as guards.