Good first attempt.
A suggestion to you would definitely be to work on the smoothness of your sprites. I noticed during the battle that there was something very wrong going on with Shadow. I think this lower graphic quality in your sprites came about when you ripped them from their sheets. If you're not doing do already, you want to use trace bitmap to grab the sprites, not break apart. And when you do trace, make sure all the values are set to 1, and you want curve fit to pixels and many corners. This should ensure you retain the original quality of your sprites, as well as make it easier to erase those rnadom bits of black I see hidden in your sprites.
Now that that's out of the way, I would either make the battles quite a bit more extensive, or stick to a movie. I understand that was only the first, but still, 2 turns does not make for an exciting battle.
As for the plot, it would appear this is a crossover story since you included Link already, and those tend to get very interesting very quickly. Can't wait to see what you come up with. And I noticed at one point you had Sonic make a decision whether to immiediately go in or not. Personally I would stick with that "choose your own adventure" route, and perhaps later down the line have different things happen based on what choices you make.
That's all I have time for for now, but keep up the good work and pm me if you have any questions about anything. I'll be glad to help.