Everybody's saying CG, Pixar (real original) is the only way to go, but that's because everyone's only used to a CG Mario in the videogames. Frankly if a new Mario movie is made (which I think eventually will be) I don't want it to look exactly like the videogame I stopped playing so I could go to the theaters.
A new Mario movie could look like Spider-Man, have great action, and still be for kids. Not any of this 'Mirrormask' conceptual stuff, it could look just like a straight-action movie, not that hard to picture.
Mario: Jack Black
Luigi: Jimmy Fallon
Princess Peach: Scarlett Johansson
Bowser: Animatronic/CG, voice of Vin Diesel.
Done.