I am doing a project for IST and since I am doing it all by myself and that I cannot model I thought maybe I would try making texture sprites for the characters. Know how I can set up specific texture clips for when the character is idle and dying?
You can use the Community-written SpriteManager script, which is probably the best option if you want to use sprites inside of Unity (short of doing all the dirty work yourself, which is no fun):
http://www.unifycommunity.com/wiki/index.php?title=SpriteManager
One option is to use Sprite Sheets (and see Sprite Tutorial). Basically, a sprite sheet is a very long Texture image containing multiple versions of the sprite in different poses - you pick different poses and apply them to a Material (using Texture Offset). So if you change the pose each Frame, it looks like the Sprite is animated.
There is also a (very short) Sprite Offset Tutorial on YouTube by GargerathSunman, which is mainly a teaser for tutorials that he sells, but might give you some insight.