There are lots of options for creating 3D characters for animation, and they are often made from scratch by mesh-modeling artists. But it's obviously a very often-needed task, using a lot of common elements, so you'd think someone would come up with a tool to make it easier. And you'd be right. The free-software tool of choice for this task is MakeHuman. I had looked into a much earlier version of the software before, but today it is rapidly approaching the first real release, version 1.0 (currently it's at 1.0-Alpha 5, with plans to go through several more alphas still). The progress is remarkable, and this is going to be a really important tool for 3D modeling in the future.