A childhood dream come true. I've always wanted to see the PlayStation characters duking it out ever since the original Super Smash Bros. got released on the N64 back in '99.
Confirmed characters so far (as shown in current videos) are...
PS1 era:
-PaRappa the Rapper
-Sweet Tooth (yes KaptainKhaos, he's in! :D)
PS2 era:
-Kratos
-Sly Cooper
PS3 era:
-Fat Princess
-Colonel Mael Radec (though Killzone started off on PS2, he was the main antagonist in the PS3 sequel)
Paul Gale Network (where the game was first mentioned under the name "Title Fight") said that Nathan Drake and Jak and Daxter will also joining the roster. Though not officially confirmed, Ratchet and Clank and Cole MacGrath will most likely be playable as well. 3rd-party characters have also been confirmed for the game, so we will probably see the likes of Solid Snake, a Final Fantasy character (Cloud or Lightning), or possibly even a Capcom character appearing.