I presume its exports 'multiple meshes' , kind of a snapshot.
Yes, because there are no bones, it has to store each the position of each vertex each frame. It can make some pretty huge files.
But obviously the advantage with bones is you can have much higher poly counts and share animations.
Yep. Plus MD2 apparently has vertex wobbling issues. And lights don't affect MD2's quite right. And you can do some fancy tricks by manipulating bones in realtime.
MD2 only seems to allow me one texture also?
I'm not positive on that one, but it would make sense. I don't think they were using multiple textures per character in Quake 2. Or it may just be a limitation of Adam's exporter.