I may sound really lame, but how do I import a character to use as my playable/NPC characters? I downloaded a load of sprites for characters but none of them were in the correct format. Could someone please help me and give me some sites where I can download some sprites for my game?
The .cha format is used exclusively by AGS. You can only import characters that were exported from AGS.
Creating characters from sprites is explained in the Beginner's FAQ (http://americangirlscouts.org/agswiki/Graphics%2C_Characters%2C_Text_%26_Rooms#Creating_your_own_characters).
(Which you're supposed to read before opening a thread, btw.)
Indeed.
The BFAQ entry also list what file formats AGS can import - if the sprites you've downloaded are jpg, for example, you'll need to re-save them as a valid format. (And probably edit them to get rid of artifacting and unnecessary colours.)