1--The first person clicks on Luigi and then goes back (press 1) and moves your cursor to the edge of the screen (be sure not to be on any specific character). Then the other person clicks on Luigi and then they go back (press 1). Player 2 moves their cursor (the pointer) off the tv screen.
2--The first player than goes back to the previous title screen again by pressing 1. Then the first player clicks on 2 to move to the character screen. Both players should now be showing as Luigi. Both players select ok and continue.
This works when your wii remote is turned sideways.