A mod, is something that modifies your game, changing it. Lets go over the different kinds of mods:
1. Texture mods: these mods will usually not change anything about the character except the way he looks, for example; i have recently installed a mod making KCM (kyuubi chakra mode) naruto's IA (instant awakening) into a KCM mode we see know in the anime. These mods will usually work online. Some texture mods need to be installed through a progeam called texmod.
2. Interface mods: these mods cannot be seen by anyone but you and don't have much impact on the game, they can change the color of bars, and colors of buttons, but they don't have a major effect on the game.
3. Map mods: These mods change some of the maps in the game, some of the maps are taken from story mods and some were taken from previous games, sadly, they only work online if both players have the same mod installed.
4. Moveset mods: These are (in my opinion) the best kind of mod out there for a couple of reasons. they can change a large amount of stuff about the character. give IA chars AA (adversity awakening), change jutsu, tweak combos, take moves from other characters and even use attacks from previous games.

There are two ways of installing mods (that i know of). The first one is the normal one, you will download a folder called something, inside there will be a folder called "data_win32". In order to apply the mod you must copy the "data_win32" folder and paste it inside your naruto game folder.
It will most likely be located in here: Computer > Drive (usually d/c) > Steam > SteamApps > Naruto Shippuden Ultimate Ninja Storm 3 Full Burst (Freaking 8 words) > Paste. Once you pasted the folder it should look like this:
(if the link deosn't work i have also uploaded a picture in the guide)
If you want to install more than one mod, you just do the same thing again, and when it askes you if you want to paste the file even though there already is a folder with the same name in that location, just select merge and you have both mods installed.
The second way of installing mods is through texmod (this will only work for texture mods)

Here is a list of all mods i recommend using and some YouTubers showcasing/creating them:

Mods:
1. "Unlock_NPCs" - this is probebly the best mod out there, it gives you accses to all jutsus only availble in the book inside storymode, like demon wind jutsu for PTS naruto, Orochimaru with snake sword jutsu, Kakashi with water dragon jutsu and more. It also lets you play with Edo kages. This mod will work online without any issues except when using water style kakashi, in that case both players need to have it installed.
http://www.mediafire.com/download/vfzojv9mq66bxxi/Unlock_NPCs.zip
2. "Modded stage selection" - this mod gives you maps from previous games and from story mode, it has the 5 kage vs madara map and even Orochimarus lair from storm 2.:
http://www.mediafire.com/download/p6b0mq61bd7xaeu/Stage+Selection+Mod.zip
3. all special naruto mods - this mod contains special naruto mods, it has naruto hokage (sage naruto) naruto improved kcm (bijuu naruto) and goku naruto with kamehameha rasengan -freaking awesome- (armor naruto).
https://mega.co.nz/#!bRh1HSJB!A1pVsEMn2hwkZK4PLym7XFYIlTYhsczqPzSlj1xV030

Users:
1. "UltimateOmbuStorm" - He makes a lot of great moveset mods for many characters.
http://www.youtube.com/user/UltimateOmbuStorm
2. "Naho Saenoki" - He does a lot of mods, from maps to movesets and is very good with modding.
http://www.youtube.com/channel/UC2YZj6hRTdQSMCzE2qDGDbg
3. "BlackBeetleKing" - He usually showcases mods, but also has lots of mods for download.
http://www.youtube.com/user/BlackBeetleKing
4. "Cybore" - He does a lot of unique mods and even takes ougis from other games.
http://www.youtube.com/channel/UC-9BfaIDCh970yRE3-Lgvdg/feed
5. "Typhonua" - He does many kinds of mods and even showcased kinkaku and ginkaku borthers as playable characters.
http://www.youtube.com/channel/UC-9BfaIDCh970yRE3-Lgvdg/feed
6. "PS360HD2" - He does a lot of naruto and anime news but also showcases a lot of mods.
http://www.youtube.com/channel/UCudIY7_1bL5fvl0KEYdZFLw
7. "Wajinshu" - He showcases a lot of cool mods and does naruto related stuff.
https://www.youtube.com/channel/UCrEpjpIJ6fZpkKb7-I3C4Tw
8. "FireBender2112" - Makes really good texture mods for naruto
https://www.youtube.com/user/TheFirebender2112

I know it sounds hard, and with codes and wierd number, but it's acctually pretty simple, and i will now teach you how to mod movesets step by step.
1. Do what this video (by Naho Saeoniki) shows:
2. After you do that you will have a unpacked data folder. Let's say we want to mod Kakashi. we take his combo file located in Naruto Shippuden... > data > sim > data.cpk_unpacked > data > spc.
Than, we copy that file and paste it inside the new spc folder inside data_win32, that's the file we are going to chage.
3. Watch this video (by me)
4. Try changing Shikamaru like the video shows you, if you can't get it to work you can always add me or ask someone else.
5. Do it yourself, make up your own original ideas and create new mods.
6. Codes:
cmb00 = combo hit 1
cmb01 = combo hit 2
cmb02 = combo hit 3 (and so on)
Very important, sometimes the order is mixed, in that case it's usually what's first and if not just look at the Damage_ID.
Any attack that ends with_n is a non cinematic version of the attack
cmr00 = tilt hit 1
cmr01 = tilt hit 2 (and so on)
Sometimes there will be only cmr00, if the tilt is only 1 hit.
cma00 = air combo hit 1
cma01 = air combo hit 2 (and so on)
the last hit will most likely end with Damage_ID_Smash_Down
hola0 = grab
awatk00 = awakening combo hit 1
awatk01 = awakening combo hit 2 (and so on)
awatr00 = tilt (and so on)
awagdi00 = wakening grab
7. Damage_ID:
After most attacks there will be a code starting with Damage_ID. that code changes what happeneds to the enemy once he is hit. here are some codes:
Damage_ID_SMALL_UC - most of the Damages starting with "SMALL" have a small stagger.
DAMAGE_ID_STAGGER_NORMAL - Has a lot of stagger, also pushes the enemy away a bit.
DAMAGE_ID_STAGGER_ENEMY - pulls the enemy twords you.
DAMAGE_ID_ROT - has a very long stagger because the enemy spins.
DAMAGE_ID_RISE - launches the enemy into the air.
DAMAGE_ID_SMASH_DOWN_BOUND - after the enemy is pushed down, it bounces.
You can find all these DAMAGE_ID's and more in the damageprm.bin file inside spc.
Good luck and add me if you need help :)

I've made a couple of moveset mods and i'm planning on making more in the future, here they are:



Nagato -




Jiraiya -




Hidan -



Yamayo -



Mei -



Shizune -







Itachi -



Pain -



Sage Kabuto (mini moveset mod) -



Updated characters -








Hope you enjoy them :D