Hey how would I go about making a biped that is just a sprite with collision that animates as a moving texture? Like how NPC's in DOOM looked and functioned. Same question with FP arms/weapons.

Have the biped as the flat plane, place animated texture on it, setup a function block to animate it. For the FP, since im assuming you want the arms to animate properly with it, have the arms completely invisible, and have the gun FP as the flat surface with animated texutre including the arms there.

Or, use OS, screw with objects angles, and have them magically flatten themselves from you breaking angles.
http://www.xfire.com/videos/5fc64b

Well the plane should always face the player like a sprite. How do I trigger the correct texture animation for each model_animation?

Well, bipeds dont have much for function blocks. If you really want all the animations, then each animation swaps the plane out with a different one with that texture animation. For facing the player.. your either gonna have to make them always stare at the player, or deal with just using a shader transparent chicago set to fading on parallel.