Here's something I made awhile ago for Pokemon TI and figured maybe someone else can use it, as I am not currently working on Pokemon because of Nostalgia and I don't see myself being able to make any entry for the Cemetech contest. This requires Celtic III or DoorsCS 7 and will not work with xLib.
Included in the zip is:
AATALK - Demo npc/sign interactivity program
AAWALK - Movement Engine
APKMAP - Program holding demo map of Pallet Town
APPIC - Picture viewer
All the pics. They are all hacked, so you'll have to group them to send them to your calc. You can just drag and drop them into wabbit, though. Just send all the pics to the archive. If some tiles glitch up, try unarchiving some of the pics, because this can happen with Celtic sometimes.
Here's a screenshot of the engine in action:

And here's a screenshot of the picture viewer in action:

The picture viewer is to help you organize and reference your tiles easier. It currently assumes you have 5 sheets of tiles. You can change this if you'd like.
Also, by pressing 2nd, you can see the index number of any tile in the current sheet.
The map is easy to make, you simply make a matrix map like you normally would for the real(2 command. The engine currently uses 16x16 tiles.
In order to give the illusion of the player being masked over a tile while walking around, you have to organize your tileset like this for all walkonable tiles:

You don't have to organize them that cleanly, as long as the character sprites come right after the tile and are in the correct order.
I recommend making the tiles on the computer then using nitacku's multi-level greyscale renderer to get them into the correct format.
The engine will then check what tile you are currently on and your direction and use that to fetch the appropriate direction masked over the terrain.
I hope someone else finds this useful. But, please give me credit for this because I worked really hard on it.

Please let me know if you have any problems with this.