http://www.youtube.com/watch?v=WP3eHBhwv3I

So long story short, like in street fighter and other fighting games, there are different types of hits, soft, hard, fierce. The same is to be said for this RPG. The only difference is you have a finite amount of energy per-round. That being said, each type of hit does different degrees of damage. Id est: Soft hits cost less, but do less damage, medium hits do a little more, and cost a little more energy; and it just goes on like that all the way up to fierce. You can combine the usage of the types of hits to make different combos and specials. Some are more effective than others.

I feel a system similar to Xenogears’ but with the actions being pre-defined (blindly) before hand would be a great game.

I also like the idea of having a crew that mans the robot, as opposed to just it following radio commands. That way the game can be deeper than just, “Oh, I’ll just give him some more armor to beat this boss.”
Example, you can have a character piloting the arm that is better at throwing right hooks than a jab punch. Or there are different levels of captains that can be under your command. Some may take better orders than others.
Every crew member would have stats. The captain’s would control actions such as blocking, and dodging command responses, and things of that nature. The leg operator/s would control things like walking speed and stability (from falling over?). The arm operators would have different styles of hitting, grabbing, etc.

How did the fighting work in Xenogears? I never got around to playing it.

If you check out the mechanics they used in the video, i can see the “Concept” at least being very entertaining.

As for the battle system for this type fighting system being very much like they the fighting system in Xenogears.

Honestly, if I were given the opportunity to make this into a real game, I’d probably do something closer to the Drones game I described a few weeks ago. It’s a stronger design, and it would fit the setting perfectly (what’s more natural than inventors building custom robots?). But I already wrote that idea, so I couldn’t just reuse it now.

I’m not sure about the “choose 3 actions in advance” fighting mechanic, though. It can boil down pretty fast to random rock-paper-scissors. The idea in traditional fighting games is that is your enemy tries a big, risky attack (or any attack, really), you have a chance of seeing it coming and countering appropriately. So there’s a lot of tension coming from you being able to read the enemy’s movement. If he’s jumping at you, you’d better block high or launch an anti-air blow ; if he’s coming in close, he might try to throw you, so hit him first… and so on.

But with this mechanic, you have effectively no real defensive options and can basically only hope that the gods of chance will favor you. And that doesn’t exactly make for a very gripping gameplay.