There are several online modes to choose from, either with friends or strangers, more casually or seriously. The main menu has four options.
This will allow you to play with people registered as 3DS friends. You can create a room and set the rules however you like, pretty much like playing locally. If one of your friends is hosting a room already, an icon will appear on the With Friends option. This is the only way to play online with certain combinations of settings, like items on Final Destination.
Here's where things get a bit more complicated.
With Anyone is how you play with strangers. All With Anyone matches are 2 minute point matches. Once you choose this mode, you'll have to pick if you want to play For Fun or For Glory. For Fun mode lets you choose between a four-player free-for-all or two teams of two. (Players 1 and 2 will be one team, and 3 and 4 will be the other.) All items will be turned on, as well. You can fight on any stage except Final Destination.
For Glory only allows you to play on Omega stages and Final Destination. There are no items, and, on top of the With Anyone modes, you can play one-on-one two-stock battles. It keeps track of your wins and losses and, being a Smash
game, a crazy number of other stats. Everything from your win rate to your average KO's per battle to the total amount of damage you've taken across all matches.
In either mode, you'll be forced to disconnect if you play like a jerk. This means just standing there idling, self-destructing intentionally, persistently targeting one person unfairly, or straight-up cheating through hacking. Be nice, ok? These are recorded in your records, too! Every unfair disconnect (or intentional one) is a mark of shame you'll carry to your grave.
This little side mode pits characters against each other in a different way. You'll see a pie chart showing two or three characters, or two or three groups of characters. You can contribute points by playing as one of the shown characters online. Your placement in battle will determine the number of points you earn. You can only contribute one battle per 16 hours. After a few days, if whoever you've contributed the most points to wins, you'll get some loot. The quality of the loot seems to depend on how much you contributed. For the first few rounds, you could tell who was in the lead by looking at the pie chart, making it easy to hop on the bandwagon and just side with whoever was already winning. This has since been patched to hide the percentages until the round is over, meaning bandwagoning is no longer possible.
Sometimes you just want to watch battles. Players are assigned odds based on their win rates, and you can bet gold on them. The more likely a player is to win, the less gold you'll win. If you bet on someone who comes in second in a four-player match, you'll still win some gold, but not as much. If you bet on the winner, you'll have a chance to bet your gold again on the next match for even greater winnings. You'll obviously win more than if you simply bet the same amount without a streak. Sometimes you might get a Bonus Chance, meaning picking the winner will earn you a prize (such as a piece of equipment) on top of gold. The quality of the prize seems to be determined by how much gold you bet.
For less involved spectating, there's a Replay Channel full of replays of specific characters. You can choose the character you want to watch, as well as the mode they were playing. (For Glory, For Fun, Team, 1 vs. 1, etc.) This is a nice way to see how other people use specific characters. You might learn something useful!
The World Status map will show you who is battling where in the world at that moment. Some random facts will scroll across the top of the screen as well. You can watch and bet on the next match from here, if you'd like.