In a Spanish interview with Smash Brothers Brawl director Masahiro Sakurai, he revealed that Sonic the Hedgehog is already in the game, but they are waiting for SEGA's final approval. Since the game is almost done, Sakurai has given SEGA until July 26th to approve.
Updates:
It has come to my attention that the source (sonicstadium.org) has removed the article, but a posting of the article was put on http://www.g4tv.com/thefeed/blog/post/677802/Sonic_in_Smash_Bros_Brawl_if_SEGA_Agrees.html and http://gonintendo.com/?p=21631
This article is speculated as a rumor since the story is in another language and hasnt been confirmed by either the game developers or sega
