I never got to play Sly in the EU beta for obvious reasons, so I'm going to explain how to put up a good fight against most Sly players. Sly is one of the more difficult characters to really pinpoint, but I'll do my best to make this acronym work well. To do well against Sly, you need to be a THIEF:
TIMING: Timing is one of the most crucial aspects of Sly's moveset. If you can quickly learn how that particular player plays Sly, and learn how much that player relies on actual timing for his attacks, you can get a grasp on what you need to do to disrupt him, take him out of his comfort zone, and win.
HIDING: Sly's invisibility is one of the greatest things about him. Using anything above a lvl1 is most likely going to fail against Sly, as he can just hide from your attacks. When playing a skilled Sly, I'd recommend you don't use above a lvl1 because from my experience playing as him, it just doesn't work.
INVISIBILITY: Yes, invisibility is different from hiding. Sly's invisibility, when used for hiding, is straightforward. When used offensively, however, it's deadly. Sly is the anti-Radec for a reason; he can easily creep up behind you and pop up screaming
with his lvl1. That's how I get quite a few of my lvl1 double kills (I've played barely any FFA this time around, so I can't say I've had more than three triple kills with it). Make sure to keep an eye on Sly as much as you possibly can.
ELECTRICITY: Sly's entire arsenal revolves around electricity, almost as if he was Cole. If used right, Sly can keep you stunned for up to a full minute out of the match. 1/3 of the match not moving and getting attacked. Just put that into perspective: For every two seconds you're playing in a match, stop moving for one second. Now imagine how awful that must be if you're FORCED to do that. You really have to watch out for a pretty much every air move he has and almost every non-square attack he has, because you will get staggered if you don't prepare.
FOLLOW-UP: Simply put, you can't give Sly an inch. With some characters, like PaRappa, you can let off them for a short time, and there are normally no ill consequences. However, with Sly, every second you give him is one that'll cost you. There's just so much he can do to make you pay, so you have to make sure he can't do that. You have to follow-up on every attack or you'll regret it.
I'll be getting to my backlog dailies again today and tomorrow. I also want to warn everybody ahead of time that, depending on how badly hurricane Sandy hits me (I'm supposed to be right near the eye, which is never a good thing), my power could end up going out. Last year at this exact time, my power was out for a good week due to that storm, and this one is supposed to be worse. If I'm completely absent from the forums, that'll be why. I'll try to let somebody here know via a friend's computer or a school one or something if that happens. Anyway, do you guys have any other pointers towards fighting Sly? Let me know below!