The only ones compatible with the first game are the original characters. You can use the older ones on the newer games but not vice versa.
With that said, my recommendations are :
Magic - Gotta go with Spyro. Its his game after all!
Earth - Personally I like Dino-Rang. Really a strong character when leveled up. Not sure why he hasnt had a series 2/3 character made yet
Water - Slam Bam. All around strong
Fire - Ignitor. When he is at full level, you could put him against any character at all in all 3 games and have a good chance of beating anyone.
Undead - This is a tough one. I dont think any of the original undead characters are any good. But for uniqueness alone, Ghost Roaster
Tech - Drobot. Once you get his autofire attack, he is untouchable.
Air - Another tough one cause of lack of great character. I honestly can not recommend any of them.
Life - This is a tough one cause of 2 great characters. Camo and Stealth Elf. Both are among my top 5 in all 3 games combined. Stealth elf eventually would get the nod cause she actually my all time favorite. Just a tiny ball of ass kicking.
