For some odd reason my lengthy post disappeared -_-
MAKING MARIO SHOOT STUFF
STEP 1: Make a new condition by right clicking this:

Now click "New condition" or "Add condition" or whatever it is.
Click the joystick and:

Okay. Now we'll make Mario fire when Fire 2 is pressed. Check the box next to Fire 2 and click Okay.

That's your condition. Now to make it do something, right click under Mario and select Shoot an object.

Select the object to be used as a projectile. I'm using a SMB Allstars SMB1 fireball.

Click Okay, and select "In the direction that asfraskld is facing". Set the speed to whatever you'd like.

Click Okay and run your game.