I forget about the Suns. Sir Charles, Thunder Dan Marjerle, and KJ were a tough team as well.
No Sir Charles when they had 3 man rosters.
You are correct though the best teams were the Sonics, Rockets(Olajuwon, Horry, Thorpe), Spurs(Robinson, Elliot, Rodman), Knicks(Ewing, Oakley, Starks) and Magic(Penny, Grant and Anderson). Remember no Shaq either due to Shaq Fu.
The key in NBA Jam is not having a team with a small guy as they are easy to push down and are impossible to push others down. So I avoided the Jazz, Hornets, Bulls and Blazers due to that.