The damage percentages in Super Smash Bros. is all important. the damage percentages indicate how much damage your character has taken, as well as how far they'll fly from the next particularly strong attack.
In DSBGX, it works the same way. In battle, each character starts with a damage counter of 0%, indicated at the beginning of their first battle post. The more hits a character takes, the higher the percentage rises. When a character's percentage goes over 150%, that character is KO'd.
It's entirely up to you on how damage rises, but keep it reasonable. A single attack does not do 75% damage. A special attack does not do just 3% damage, unless it was a PK Thunder.
EDIT: Due to the installation of the mythical Dice Code, there is some more things you should know about Dairantou Smash Bros. GX. We now have items.
How items work is they appear when you want them to. Simply roll the die labeled "Item" in the die tag, and you'll be given a number from one to twenty-four. Here's those items for you:
1 - Super Scope (Melee - Shoots rapid fire or charged shots. Ammo: 30)
2 - Maxim Tomato (Kirby - Restores 50% damage)
3 - Power Ring (Sonic - Protects you from damage once.)
4 - Screw Attack (Metroid - Allows you to do the Screw Attack when you jump or throw it at an enemy for them to do the Screw Attack.)
5 - Heart Container (LoZ - Restores 100% damage)
6 - Smart Bomb (Starfox - makes a big explosion.)
7 - Ray Gun (SSB - fires a laser that can juggle your opponents. Ammo: 16)
8 - Franklin Badge (Mother - Reflects projectiles)
9 - Fan (SSB - Can slap enemies repeatedly.)
10 - Super Mushroom (Mario - makes you grow bigger for two posts)
11 - Poison Mushroom (Mario - makes you shrink for two posts)
12 - Dragoon Parts (Kirby - Get this number three times to make the Dragoon.)
13 - Warp Star (Kirby - Terror from above! Get this to soar into the sky, then crash down.)
14 - Motion Sensor Bomb (SSB - Throw this onto a surface. Then, when someone/something walks toward it, it will detonate.)
15 - Home Run Bat (SSB - Swing it at an enemy to do massive damage, but it's a slow swing.)
16 - Lip's Stick (Panel De Pon - Causes a flower to sprout on whoever is hit by it, causing 3% damage per post for five posts.)
17 - Mr. Saturn (Earthbound - breaks shields. Pwaah. Pwaah.)
18 - Starman (Mario - Makes you invincible for three posts.)
19 - Hammer (DK - A powerful weapon.)
20 - Bunny Hood (LoZ - Makes you run faster and jump higher)
21 - Beam Sword (SSB - A strong weapon that increases in reach for side smash attacks.)
22 - Metal Box (Mario - Makes you heavier, which causes an increase in defense for three posts.)
23 - Smoke Ball (Brawl - makes a smoke screen, which obscures vision for three posts)
24 - Fire Flower (Mario - Unleashes a torrent of fire for as long as you use it.)
Now, as for the Smash Ball, anyone can spawn it, but everyone participating in the battle can attempt to get it. Roll the die labeled "Smash Ball Appears!" and a number from one to fifty will appear. Whoever has the higher number gets the Smash Ball, and can use their Final Smash.
If you want to use your Final Smash, roll the die labeled "Final Smash". This'll spawn a number from one to thirty, indicating its effectiveness.