Hi thegamedesigner,
here my very first thoughts about realizing a hovercraft with ODE physics

:
First of all, code a common physic movement for a dummy-vehicle that is touching the ground. Then make this dummy invisible.
Now create your hovercraft some quants above your invisible dummy-vehicle and make its position related to the x,y and z axis of your invisble dummy.
Do this once a frame.
hovercraft.x = dummy.x;
hovercraft.y = dummy.y;
hovercraft.z = dummy.z
+ 300 ;
hovercraft.pan = dummy.pan;
hovercraft.tilt = dummy.tilt;
hovercraft.roll = dummy.roll;
If your hovercraft also should be a physic entity, than use something like this, also once a frame:
phent_enable(hovercraft, 0); hovercraft.x = dummy.x;
hovercraft.y = dummy.y;
hovercraft.z = dummy.z
+ 300 ;
hovercraft.pan = dummy.pan;
hovercraft.tilt = dummy.tilt;
hovercraft.roll = dummy.roll;
phent_enable(hovercraft, 1);This thing could be some kind of lagy

depends on how, and how many opponents you will implement

Just an idea, dont know if its gonna help you...
cheers
zwecklos
edit: I just got an additional idea, use little bouncing on the dummy on the ground to support a better hover-feeling.
edit2: And of couse, not to much friction for a nice glide-feeling
