Let's say you're playing with Emma, Cyclops, and Colossus. If Colossus is 5 squares away but Cyclops is 2 squares away, can Emma use side step?

Yes. The power doesn't care if there are other friendly characters with the keyword closer than 5 squares away. It only checks to see if there is one that is more than 4 squares away.

Yes, it is not checking if there no characters within 4 squares, just that there is one not within 4 squares.

Darn. Ruled it wrong yesterday. Didn't change much but hate getting those things wrong ya know? Thanks guys.