I just played CivFighter on the highest difficulty for about 10 minutes. I had tried to create my own Mugen game a few years back, however I failed.
The two fighters, Abyssinia and Polynesia would look great if they didn't have that annoying white static outline.
I used to play Mugen all the time and one thing which I had liked was that, like the real fighting games, there were multiple attacks, combos, and special moves. I know CivFighter is just in beta, but are you going to add different attacks (ex: more than just ";" and "."), combos, and unique attacks (ex: Japanese doing some samurai attack, Greek doing something like Achilles did off of the movie Troy)? You might want to consider having them able to use their weapons. I was kind of wondering why Abyssinia would hit with his bow instead of fire an arrow or two. I think if you made the fighting more unique and interesting the game would be much better.
I also think you should improve on the stages graphics by well just making them look better and perhaps add an audience like Street Fighter, etc. Music reflecting the stage would be awesome too (ex: Tupi music in Brazil stage, Greek music in Greece, etc).
You might want to work on the difficulty levels too. Perhaps just make 6 (very easy, easy, medium, hard, very hard, very hard #2). I played on the most difficult level and I won easily.. the computer player needs to be much better.
Everytime I exited out of CivFighter my computers screen went crazy and I had to restart.. you might want to work on this.
Well other than that it was pretty funny. If you need help with anything, I'll be glad to help you.