Tips from a guy who's probably beaten you, more than likely as Parappa, but also Radec.
Kratos has a lot of range, but he also has long recovery times because of that range. Block, and if he uses s,s,t,, s,s,s, or s,s,us then roll in right at the end of the second swing you'll avoid the third and then you can follow up with a combo that hopefully you don't drop. The square combo is really his bread and butter. If you learn how to overcome that you're golden. The rest of his skillset is quite crappy unless he hits you with the s,s,us in order to use that as a starter to his combo.
Radec has his sniper. Everyone spams his sniper. That's his game. But Radec is difficult to play as up close. If you're playing against a noob Radec, stay up close and keep combo attacking them to death. If he's a good Radec he'll be great with his close range moves as well. But to be effective against him is to know his close range moves and know how to stay close to him and how not to get blown backwards. One of the characters I play as often is Radec so it's quite simple, but play as him and get good with his close range combos and you'll be good against him. To get up close to him, here are a few tricks. As Parappa, use the kick or mic dash in air a few times and when he hasn't thrown a plasma grenade and you know you're lined up, hit him with a rt to start off a small combo. If you need to drop down, time his sniper rifle shots and use ds to drop down quickly and double jump back up. Another option you can use is guard, roll, guard, roll, etc. With Sly, double jump, turn invisible, and then hold X to float slowly while going towards Radec. When he fires off his sniper, hurry and drop down then double jump back up. When you're near him don't let him get away.
Sly's l/rt is a bit of an overpowered spam attack It takes priority over most attacks, has excellent recovery time, and sends him back far enough for him to be completely out of range of most mid range attacks. As Kratos, block, and as soon as you block follow up with a s,s,us. As Radec, block and then follow up with standing t and keep spamming it if you can. With Parappa, block, mic grab(you have to be accurate so you have to throw it right when he's about to hit the ground.) That's the best and cheapest attack in Sly's repertoire, once you've got that down, his other attacks shouldn't be an issue.
Fat Princess can be played well, but she'not that great a character. Just make sure if she has a level one to always roll away from here. I don't think her cake special can be evaded with a roll.
Also grabbing gives you 10-20% of an enemies AP. Don't bother grabbing an enemy with less than level two. It's not worth it other than showing off unless it's a character that can combo with a grab. But you can stop players from getting level three all day long. You can tell that it's pissing them off and working because they'll eventually stop trying to go for the level three and just use their level two. It also helps because it keeps them away from the level three while also netting you quite a bit of their AP.