In Gen2, Yellow is obviously the cannon past. Though, myself, I'd rather they had given Red a team closer to the Red/Blue games. It could be...
-Charizard (since his name is Red)
-Raichu (the most iconic character of the franchise, but let's evolve it)
-Lapras (a reminder that he crushed Team Rocket in Saffron, since a Silph employee gave it to him)
-Espeon (the Eeevee he got in Celadon is a chance to add a Gen2 touch to the team)
-Mew (after all those rumors about Pokemon #151 in Gen1, it would be awesome if it turned out that the "cannon" Red caught it after all)
-A nameless glitch pokemon created for the occasion (a nice reference to the countless glitches in Gen1; this should also be Red's trump card)