Looks good so far!

320x128 is huge. If you were to half the width it would be on par with Dethroned, which is still very big but should be fine in your case, since you're not filling the entire space.

As for weapons, I'd say anything goes, maybe except Pepper Spray (might be hard to see amidst all the fog). Judging from that small bit of a layout, I can tell you Bouncers and Seekers will work best (at least in that particular scenario), so if you plan on putting powerups for either of those, make it require a little more effort than with other powerups.

Oh and obviously, if you feel like making Battle, then make Battle