so, the question is: how big do I make the area?

2 screens (it looks like a perfectly normal game of breakout until one player hits the top wall)
1.5 screens (same, but the area with the blocks shows up on both screens)
1 screen (both paddles show up on screen, with a thin wall between them)

or should I make all of them

Ok I'm pretty much decided on the 2-screen method (it involves the least engine changes, only a 'warp' from one calc to another, and a way to determine whose balls are whose)

so there might be a normal mode, where the blocks are stationary and each player gets points for each block their balls eliminate, most points when all blocks are gone wins

a mode where for every block destroyed, a block appears on the other player's screen.

and maybe a warp block? fun fun

2 player Breakout clone would be great. I like both ideas as well. Maybe also have a power-up that inverts the blocks position too (or is that what you mean by warp block?)?

Also in future versions it would be nice if all power ups looked differently. For example, ° sometimes makes ball go through blocks and other times they move twice faster, but it gets confusing sometimes.

aaw... :'( but I liked them looking the same... 
 
I did it that way cause I thought it might make it harder... and because there are only so many good-looking 4x4 sprites.

I was thinking warp block = the ball that hits it warps to somewhere on the other player's screen. Surprise!