First game I've reviewed in a very long time so congrats on actually inspiring me to ignore my professor and do this during an English class. I've been a fan of the madness series since the very begining, and wasted (perhaps not 'wasted'...well...perhaps) hours of my life playing "Madness, Interactive". Although some of the original charm of Madness Interactive is lost in this game (as it takes on a more 'serious' tone, mirroring the progression of the actual Madness series) the improvements to gameplay, cleanness of gameplay and overall quality of this game CANNOT be overstated.
Moving on the actual content, I found that the story mode was somewhat cut and dry, with the same thing happening over and over again. Although I have no qualms about the linear gameplay (as I understand the limitations) I believe that greater diversity could be added to this mode by ALLOWING FOR THE CUSTOM CHARACTERS FROM ARENA MODE TO BE USED IN THE CAMPAIGN. This, I believe, would be a fairly simplistic feat for you to accomplish and would make the single player experience much more rewarding (or just plain fun, running around with a fully maxed out character who you worked hard for and beating in some faces).
Beyond this, I would like to see more done with dodging itself. As of now due to its effect ont he TACT bar, I only use the dodge option when an enemy is taking an aimed shot at me.
Moving on to the weapons, as has been stated by nearly everyone else, there is NO REASON TO USE ANYTHING BUT THE M249 except for RPing. The easiest way to fix this would be to significantly nerf the accuracy of this weapon (as once upgraded it is almost perfectly accurate when standing still). Beyond this, perhaps it would be interesting to have to purchase ammo, though this could get obnoxious (especially once the player has mounds of cash and has to go back and continue to buy ammo).
Still, this is an amazing game and I'm more than pleased with it. Thank you for all of your hard work and effort in putting this together.
Cheers.