Every Smasher can be represented by two relatively simple colours (a primary and a secondary) taken from a subset of all computer-representable colours - the red, green, and blue values are each either 00 or XF (X being any hex digit) for a total of 17 possible values each and 4,913 total possible combinations. Generally, more important Smashers (e.g. Mario) get priority when there's a collision for a "stronger" or "primary" colour, unless the less important character is significantly more difficult to assign to (e.g. G&W has no alternatives).
This system has been extended for Smash Arena purposes to cover stages, items, moves, and several other things. Those colours are designed to try and not clash with potential future characters and will be changed if a clash is forced, and so will not be covered here. Colours with no RGB component of above 5f (95, =3/8) get white text.
Miis are not characters (by definition) and so cannot be part of this system.
A system for when using two colours is not possible. Duocol is typically preferred over monocol where possible, but sometimes monocol is necessary, and sometimes can even be better.
To compensate for the heavily increased collision chances, and attempt to make every colour reasonably distinct from every other, any of the 16,777,216 possible colours are valid.
I figured I'd stick them on here for reference as well. Some of them are based on the colour of the console more than of the game, but as long as they're distinct it doesn't matter much.
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