Well, I'm going with Netgore instead.
This doesn't change much, other than each image or texture is in it's own file instead of a mess of tiles in one file. This simplifies laying them out.
Also, there is a Skeleton Animator/Editor that allows for some far less choppy animation, but it's tricky to make the limb textures to look right. Nice thing is this makes it easier to animate things like Wolves to be more realistic.
Here are a few images. The green troll ones are images I put together to try out the skeleton animator (for now, sidescroll only), and the little wierd Elf creatures are the basic sprites that come with the game for Top-Down.
Sprites are still very small, about 44x54 pixels or so. I'm thinking that Wolves would be wider to be in scale, and humans/highones would be taller.
I'm not sure about when a character mounts/is mounted, such as a wolfrider on a wolf. I think it would be possible to paperdoll a sitting wolfrider sprite on a wolf, or in the animator provide a skelton animation that interacts with a Wolf.
By 'paperdolling' I'm referring to the practice used in the game where one image is placed on top of another image to make a new image on the screen. Most often, it is used for tools and weapons in this game engine, but it could work for clothes or markings (make a mask for the Wolf, so that players can 'customize' their wolf), or even hair.