Black Pumpkin Bombs of Fear: Demogoblin can use Energy Explosion. When he does, hit characters modify their defense value by -1 until your next turn.

REPENT!: When Demogoblin hits an opposing character, that character's controller chooses one: give that character two action tokens; or that character's defense powers are countered until your next turn.

What happens if a character can't have two tokens added to it or can't have its powers countered when Demogoblin uses Repent? Say, for example, the character can use the Power Cosmic team ability. Can the controller still pick to have the character's powers countered even though that can't actually happen?
We're still looking into this, but for now a good rule of thumb to follow for any kind of situation like this is "You can't choose to do something that is illegal."

In other words, if a character can't have its powers countered, then you can't choose to have its powers countered. If a character can't have two tokens added to it, you can't choose to add two tokens to it.

So what happens if I use Repend on a Power Cosmic character with two action tokens?
Nothing. What? Were you expecting me to say "The universe is swallowed up by the singularity created by such an event?"

When exactly is the choice made? For example, if Demogoblin attacks a character with Super Senses, does that character's controller have to choose (and possibly counter the Super Senses) before rolling the d6? Or would the character get to use Super Senses first?
Demogoblin has to hit the character in order for Repent to function. You can't know for sure if an attack hits or not until after Super Senses is rolled. So, yes, the character's controller could still roll the d6 and possibly evade the attack.

However, once the hit is indeed successfully landed, the choice is made. So if your Demogoblin attacked a character with a damage reducing power, your opponent could choose to counter the defense powers and then your attack's damage would not be reduced.

If my character has no defense powers, and is hit with Repent, can I choose to counter the (non-existant) defense powers?
Like I said, we're still looking into this particular wrinkle. For now, though, no. You can't choose to do something illegal.