Basically, what I did (and am currently doing and smoking through the game) is block their attacks, grab and throw them into a speaker or whatever and scratch. I can usually end the match really fast and beat the snot out of the enemy.
The computer will block 90% of your strikes and if you try to grab them without blocking or dodging, they beat the crap out of you/grab you first. This is such a shitty game I can't believe I rented this shit. Def Jam FFNY and the first one was incredible.
EDIT: I know this thread is really old...I just thought it would help without making a new one.