From Sonic Retro
Fire Combination is a basic fighting stance in Sonic Heroes, used by Knuckles, Omega, Big, and Vector. It's basically a move that makes the Power character ready to attack. Fire Combination is formed by pressing the button once.
Each team has a different look to their Fire Combination. Knuckles puts his teammates on his fists, Omega retracts his hands and puts his teammates in their place, Big puts his teammates on his shoulders, and Vector puts his teammates in his mouth.
With Team Sonic and Team Dark, Fire Combination will allow them to partake in hand-to-hand combat. They can attack by punching/slashing at the enemies. Pressing the button rapidly lets Knuckles do quick jabs and, when in Super form, launch fireballs. Jumping in the air and pressing and holding will cause Knuckles and Omega's teammates to swirl around them, destroying anything around them.
This works slightly different with Team Rose and Team Chaotix. These teams cannot engage in hand-to-hand combat. Instead, they can fire their teammates at the enemies from a long distance by using Fire Knock or Fireball.
When in Fire Combination, the power characters can withstand an attack without losing their rings or shield. However, they will get knocked back and lose the stance.