Well, there you have it. Raphael Sorel is the NEW Nightmare. Now, Soul Edge will be a rapier instead of a zweihander that Siegfried wielded. Any chances of Pyrrha being Nightmare may have just went out the door or unless Omega Pyrrha becomes a whole different Nightmare/villain.
Here is the translations as posted by our illustrious and humble Tuzark:
Raphael
+ Very little I can add about him. The charts have him only linked to Amy and a few real-life figures (he was a supporter of Henry IV, for example).
+ About Nightmare's host: Soul Edge controls the host by having imprinted his own memories into him. He has forged a new personality and past out of the selected memories of the sword, which appears to account for him using Nightmare/Siegfried's old style. Not sure if it means it was a blank state beforehand, but I tend to agree with that idea.
+ The text also implies that what Dumas really really desires is to devote his soul entirely to the sword regardless of his well-being, and mentions he overwhelms his body beyond its own limits while using the sword's power.
Based on this (and assuming I interpreted all of this correctly):
1) Soul Edge will continue being the Zweihander because Inferno is using its own memories when possessing a host and therefore I am assuming Inferno simply prefers and/or is most talented with a zweihander so that will be his weapon for now on.
2) Nightmare's personality and actions (at least in detail) will vary greatly based on the host while still retaining the general personality that is associated with Inferno and its memories implanted in the body, making Raphael's actions as Nightmare probably just a perverted, twisted perception of his own (as well as his thought process and pool of options, ie politics over warfare when available) as Inferno uses the host to achieve its objective.
3) A host of Soul Edge will be used solely for the sword and any original desires or wishes the host has while wielding the sword will be drowned by the will of Soul Edge so it may use the host for its own purposes. Therefore, it is highly unlikely anything Nightmare is doing is what Raphael would want but rather what Soul Edge would want (theories pertaining to the idea that Soul Edge is keeping the host subservient by making said host believe their actions and choices are their own, ie puppet manipulation on the pychological level, are still valid).
The 2nd piece of knowledge we learn is extremely important. The implications (which make sense considering the sword's history) imply that Soul Edge (ie Inferno, the soul of the sword) will continually grow in knowledge and intelligence as it continues to jump from host to host, making it extremely dangerous.
Probably the most important leap we have noticed in Nightmare, his personality and rationale, are because a calculated, political character (Raphael) has perhaps infinite memories of manipulating events and playing politics to help him and his family maintain their status and social class. These memories are now transpired between Soul Edge; the sword now has the memories of Raphael in its arsenal of knowledge.
This means Inferno is no longer restricted by its previous knowledge. A situation involving a character that is extremely powerful and a strategic asset would be limited if Nightmare was still SC-SCIV Nightmare with Siegfried and Cervantes being the only notable hosts. No insult to the character's intelligence, but they clearly were never in an environment that gave them the experience for more complex, sinister schemes (both were essentially bandits, thieves, and/or cutthroats when Soul Edge possessed them as far as their experiences go).
Nightmare's options before: Kill character, devour soul, leave for dead
These options are what would be likely based on what our previous Nightmare has done (the only notable independent action of Nightmare was form a small group which still acted more as an alliance of warriors for a purpose rather than a complex organization).
Nightmare's options now: Kill character, devour soul, leave for dead, torture, manipulate to portray yourself as good guy, manipulate to break the will of the character with your awe-inspiring power, hold as prisoner for a bargaining chip, possess as new host due to their potential, corrupt to your side so that they may be your spy, use as a symbol for intimidation, use in order to lure out an actual threat or rival you desire, give to allies/potential allies in order to improve relations, turn her into a malfested doll to serve your will, etc.
The options are far more laid out and obviously are all things that involve the cunning and manipulation that a character (like Raphael) would have in order to come up with an see these scenarios. Our new Nightmare shows this level of intelligence and if a character like Ivy (who is both smart, has studied heavily on the sword, and knows advanced magic and alchemy) becomes a new host, that only makes Soul Edge even more dangerous as these memories would only strengthen it.
At some point, I would imagine Soul Edge could reach the point where it will be intelligent enough to begin body hopping in order to quickly gain knowledge (or intel from enemies who won't talk) and then return to whatever preferred host body it desires (servants could imprison the host until Nightmare leaps back into it in case it becomes active/alive and tries to escape). Soul Edge has become far more insidious and potentially dangerous, indeed.
--Forgon