So far the only tournament mode I have enjoyed is 1v1 For Fun.
1v1 For Glory would be fun, except I don't want to wait ~30min to get in, and possibly lose in 2min and have to wait another ~30min to find another game. 1v1 For Fun really isn't ideal, but at least I don't have to wait so long to get into a game. Besides, even with items, so long as you don't get unlucky, you're more likely to win if you're more skilled. Don't get me started on those equipment users though....
I have to say though I agree with everything Rawkstar has said. Before I found the 1v1 For Fun matches, I was thinking "You know, I almost rather they hadn't even bothered with this." Determining the winner with damage dealt is extremely frustrating. I was tied with a shulk, we both had 3 kills and 1 death in a FFA. Shulk wins of course, because he was jumping into everyone else's battles and spamming counter (he got 2 of his kills doing this, and I really couldn't compete with that damage output). I had another game with a Ryu (1v1), who messed me up on my first stock, but I managed to string him into a kill when has was at ~30%. He kills me of course (he really messed me up that first stock), and when of course he wins because of how much damage he did to me on my first stock, even though I had less health at the end. One game, I ran into a Samus who simple charged her blast and stole kills (though this is more a problem with FFA and not tournament mode itself, but the fact you can't create your own 1v1 tourneys keeps this relevant)
So all in all, while I have managed to squeeze some fun out of the mode, if Nintendo leaves it as it is now I am going to be very frustrated. I don't know what Sakurai and his team were thinking when they made this, it's frankly ridiculous. I agree with just about every change everyone else has posted so far, but I believe we especially need:
1. If a tournament fills up, don't make the players wait anymore.
2. Change tiebreaker from most damage dealt to player with the lowest %
3. Make it easier to get into/add more 1v1 lobbies. Seriously, even casuals would like to win a few rounds in a tournament, but in FFA matches they still have a 75% chance of losing their first match.
A few things I would personally like, but aren't necessary to "fix" these tournaments.
1. 2v2 tournaments (even if it's only available for 2 players playing on the same wii U)
2. 5min timer. (If they don't change the tiebreaker conditions, then this actually is necessary to fix tournament mode)
That sums up my experience/mini rant with tournament mode so far. I am hopeful that they can fix this mode, but it really shouldn't have come out like this in the first place.