> the battles [should] be agreed upon by both parties, so there exists no "newbie-hunting" - that discourages new players and then we can't beat on 'em later :-})

I figure the only actually fair way to do this is to have the tournament mode be consequence-free. You can get beaten irreparably in tournament mode, but what happens in the match doesn't actually take effect in the "permanent" copies of your characters. With possible exceptions -- for example, the victors could be awarded experience points or something.