Creating a 2D Player

Do you use the Character Controller? No right?

DO we just setup a 2d sprite with a box collider and add a rigidbody?

How would you go about creating a 2d player that can walk around and jump?

Why not using the CharacterController? You can write a perfectly working super mario style controller using CharacterController. To be able to jump you will have to use the Move method rather than the SimpleMove method. This also implies that you will have to take care of gravity yourself. And yes a plane (or quad) with you sprite texture on it plus a collider and rigidbody(kinematic) would be my way to go.