Bring Mario's HP to 5. To do so, go in the sewer near that old dude's house in the main city (wow, I can't remember any of the names in this game!), then go left into that pipe and into a kind of fortune-telling house.
After that, equip those badges that increase your attack when your health is in the critical state. You should be doing enormous amounts of damage now. Also, equip those badges that increase your dodging when your health is in the critical state. You will not get hit by her, I tell you!
I thought I was intelligent when I found out about this little game abusing trick, but apparently it was on the net for a long time...! >_>
Random game thought :
Why is Bionic Commando Rearmed 2 getting so much hate? We finally get a real game and they're not even satisfied... I'm starting to hate the gaming community so f****** much...
