AmazingMidi is the only program I know that can convert something/anything into midi. It's tricky, you can only convert .wav files, and you'll only get one instrument, tough.
I made a megaman character some time ago, I call him Circuit Man: Both hands have blasters, and he can duplicate himself. All the exposed parts and suff makes him rather fragile, tough.
You can use him if you like, he's basicly just lying around on my comp anyway.
First off, do you know how to make a multiplayer game? If not, read the mulitplayer tutorial. It will also teach you how to make a box for the player to type in. You can then use the drawing functions to draw the text above the players heads.