okay I need to know if there is a reason why when I put a hi-res sprites into mugen (ex. Blazblue characters)
they are badly mis-colored and I need to know if this is a problem or what.
because I plan on making a Taokaka, and this very thing happened to me, and I'm scared

I'm not the character guy, but maybe your sprites are incorrectly indexed. OR the original source is just that bad which is something you can't really control. Try re-indexing the sprite see if that works.

Either that or bb sprites arent that much compatible for winmugen. Try putting them in 1.0 and see if that works.

BB Sprites are, but they look really bad, since you have to set the scale to 0.25 or something.
We had that Ares, Ragna Mau, Daimon Haku. And yeah like GLB said, re-index the sprites.