Alright let's get this started.
This will still be standard Smash Bros fare: You rack up damage like normal, can still be knocked away with the more damage you have, and can still be KO'd like normal. Nothing different, but now with the addition of losing health.
-Getting hit not only racks up damage, it lowers your health by the same amount. (Example: taking 70% damage will also lower your health by 70 hp)
-500hp is the standard
-Getting KO'd will have you lose 50/100hp (depending on setting). 100hp loss is the standard
-Self destructing will have you lose 100/200hp (again, depending on the setting). 200hp loss is the standard
-SDing will always be double of what the KO setting is if set to standard. It can be switched around or equal if you choose
-Match is over when one player/team is left standing and all others are out of hp
-Characters who damage themselves (Pichu for one) will not KO themselves. They will remain at 1hp until they are hit or self destruct
-Since the damage meter will still be there, a circle health bar (DBZ Raging Blast style) would be best to avoid clutter
Ask questions in case I missed anything.
I also suggest an exclusive button for Final Smashes.