Sonic the Fighters/Development

First screenshots

Sonic the Fighters stems from Sega AM2's previous arcade fighting game, Fighting Vipers. Simple models for Sonic and Tails can be found within in Fighting Vipers but are unplayable through normal means. When Sonic the Fighters was first announced, they finally had a time to shine.

It would be a while before Sega allowed people to play the game. For the first couple of months, characters would just stand around looking cool.
The background is basic, the floor of South Island is a curious checkerboard of blue and yellow, and the characters lack shadows. Sonic and Tails are noticeably off-model and have fewer polygons than the final game.
From a slightly later build, Sonic is looking more healthy now, though Tails hasn't changed.

In-game screenshots

A different build was used to demonstrate Sonic and Tails fighting each other. All of these screenshots are believed to have come straight from Sega, and depict a different South Island with a textured floor and barriers similar to Flying Carpet (with palm trees as the corners).

"Sonic vs. Sonic" in a distinctly Fighting Vipers-esque player select screen.
Sometimes the characters have shadows.
Tails wins, performing a stance not seen in the final game.

Knuckles

Knuckles the Echidna was announced as a playable character, alongside the Casino Night stage. A set of screenshots were released showing him facing Sonic from different angles.

Casino Night is completely different, with no walls and a simplified background.

Amy

Next to be shown off was Amy Rose, and the Flying Carpet stage.

Tails is sporting his final design, but characters still lack shadows.
The bases for the candles are different.
A top-down shot shows the most obvious difference - the flying carpet doesn't fly. Instead it is presumably held in place by four stone pillars. The candle flames also do not constantly face the camera, so the illusion that they are not just 2D models is shattered in this shot.