The problem is that you are triggering the Animate command over and over; that is restarting the animation each time, so it looks like it is stuck at the beginning. Use the command AnimSeq to only start the animation if it isn't already in the animation.
Also, you don't need to do If KeyDown(200) twice, just put it all inside one If statement:
As for the EntityRadius, you have to bear in mind that the radius is from the origin point of the model. Psionic is probably setting his character's feet at the origin point (this is how most people animate, with their character walking on the base grid of the animation tool) so you will need to raise up the origin point for EntityRadius, probably by attaching the dwarf to a pivot and using that pivot for collision detection.
Also, you don't need to do If KeyDown(200) twice, just put it all inside one If statement:
If KeyDown(200) MoveEntity blah If AnimSeq()<>seq Animate blah End If
As for the EntityRadius, you have to bear in mind that the radius is from the origin point of the model. Psionic is probably setting his character's feet at the origin point (this is how most people animate, with their character walking on the base grid of the animation tool) so you will need to raise up the origin point for EntityRadius, probably by attaching the dwarf to a pivot and using that pivot for collision detection.