Is there a possible way to add a revolving compass into the HUD, if thats to vague then is there a way that you can implement a compass as in (directions pointing North East South And West)

Some thing similar to the AR compass?

Yes, and I know that you can make the AR so it actually says N/S/E/W but I want to know if there is a way to put that into a HUD

that is done with the assault rifle using functions and physical 3d geometry on the model for the gun. to emulate this with the hud, you would need to work with multitex overlays. you know those ticks on the sniper rifle scope? look at those for reference. im not sure if they work horizontally though.

A plane that has the textures and is set to stay in 1 spot in animations?

that WOULD work. thats how kirby did the 3d helmet for metroid online. the issue is that the compass function only supports 8 bitmaps (i might be wrong here) and 8 directions (north, east, south, west, and diagonals), so you could make it look like a scrolling compass, but it would be very choppy. also making it stay in one place would probably require another bone in the animation which means all, and i mean every single cyborg animation would have to be de-compiled, have that bone added in, then RE-compiled with the bone in it. same with the model and the collision.
bottom line, if multitex overlays dont do it, it isnt worth your time

Is there any other way maybe just text that shows N/S/E/W and so on. Have something that pops up showing the direction, I really can't find the right words for it, something like a digital display, just to make it not so choppy as you said.

so like, an hud element that shows N, E, S, W? that only way to get that would be the 3d plane attached to a bone....... try linking it to the pelvis and see if that works.
your other option would end up looking like the compass in the halo 3 alpha, if horizontal multitex overlays actually work in this engine. open the sniper rifle weapon hud interface and look under "multitex overlays" for the ticks that show when you are zoomed in, and try to emulate that for a horizontal scroll and use tickmarks with the letters in the bitmap. multitex overlays are pretty heavy and confusing functions, but you could do some pretty cool stuff with it that could totally change the look of your hud.
if you are asking if you can make the game display the direction as a message, no. you cant.

I remember Masterz playing with this awhile back, maybe drop him a pm.