Unsure what you are asking. If you mean "is it possible to use this character incorporated with real life video" -- yes -- check out all of the camera tracking hubbub going on at Blender Nation and Blender artists If you are asking if "I" could add the animations to real life video -- depends on the situation. I could, but it's not my strong suit (it would be my first live action /CG overlay)

Yes you can. I like to do that.

This file was never meant to be renderable-- but to hold the model so you can append into a scene file --- the material is overriden in the layers menu here. anyways, to render the materials you need to go to the render layers, and there is a "Material" box (just to the right of Mask layers and just below the scene layers). This sets the global material that overrides object materials. "Material" (a generic white) is in it. Delete that "Material" and the materials will render as normal.