Sonic Battle Hack Suite is a tool I've been creating that will soon allow you to edit every aspect of Sonic Battle: characters, sprites, text, etc.
SBHS is written in Java using JFrame as a GUI, but I may change it later to some other GUI framework. Maybe even LWJGL for a cool sprite editor.
This only works with the American Release of SB, no Japanese or European versions over here.
Making a new character
You can download the latest release and learn how to use it on GitHub.