I'm as surprised as you are. It seems that the latest addition to the Super Smash Bros roster is none of than Cloud Strife from Final Fantasy VII. He brings not only his limit breaker attack but also chocobo Mii costumes and a Midgar battle arena.
While Nintendo and Square-Enix haven't exactly been adversaries in recent years--their only real hostility happened during the N64 days--there hasn't been a new main series Final Fantasy game on a Nintendo platform since the SNES. There have been great remakes for the DS and of course the Crystal Chronicles series, but FF7 has always been a sore spot since Square dumped Nintendo and made it a Playstation exclusive way back in 1997.
To see FF7's star character show up out of the blue as a new Smash Bros fighter is shocking to say the least and is sure to make a lot of fans happy. I have to wonder, does this mean Final Fantasy will show up more often on Nintendo platforms from now on? Square-Enix has made the Dragon Quest series a Nintendo exclusive for the past several years so I can only wonder.