Hey guys, newbie to the KS forums here, but I can't help but notice this thread. I'm a veteran Mugen user, so I know a thing or two about it. If you guys are going in for making chars and everything, (assuming you're drawing every sprite by hand) one of the easiest programs you can use to make your characters without boringly straight-coding them with less hassle is called "Fighter Factory". I've used it to make a few basic chars, since i'm not that great at making sprites, and have only done basic movesets. You might also wanna try to take this project into the Mugen Guild forums (http://mugenguild.com/forumx/
) which i'm also a member of; and they should be able to help you out a GREAT deal with making the characters. Best of luck with this guys, i'd love to see Katawa Shoujo mugen characters!
PS (make them kuromaru compatible, and if you don't know what I mean now, you will when you ask the mugen guild forums ;p)