For example, if you want to animate a character throwing a Fireball and hitting a target NPC as you would've seen in-game, do you have to take a ball of fire NPC and replace it over time closer to its target, run a ball-of-fire-explosion animation over time at the destination, run a target NPC react animation over time, etc?
To answer your question specifically about a fireball: A ball of fire is not an NPC, you don't keep giving it new coordinates "walking" it over to it's target. A ball of fire is just an "FX oneshot" command in which you enter the coordinates of where to start it (your character) and finish it (an NPC or a wall or wherever), and the game engine does the rest - creates it, makes it fly from point A to point B, makes it go splat (just a little) and then deletes it.
But to have a character shoot an NPC and make it look like it did in-game requires several MOV's and FX's, not just the fireball FX alone. It really helps if you already have a bunch of recorded demos from when the game was live to use as reference material. If you want a sample demo of a complete fireball toss including all MOV's and FX's and NPC's et al, just ask, someone here has one (I don't have one ready, but I could make one if needed).
vI'd like to note that to make your character dribble a basketball requires only one single MOV command to your character (the basketball itself is created by the MOV command, and no separate FX command is needed) whereas a fireball's creation, path of travel, and deletion are all taken care of in a single "FX Oneshot" command.
It's confusing because an "FX Oneshot" command generates a fireball, but a "MOV" command generates a basketball.
So... How does one know if something is generated by a MOV or an FX? The hard way. By trying hundreds of MOV's, FX's, and MOV/FX combos until you get the hang of it. A big help for MOVs can be found in Leandro's Torrent download in
this thread. Of course, you can always ask for help here too.
* Is movement implemented in demorecord-form as showing a run/walk/jump animation while separately replacing the character model over time?
Not certain what you're asking here. To make a character run, you need to give it a single MOV command (basically, an emote of it running), then keep giving the character new coordinates like a trail of breadcrumbs to follow. The character model doesn't get "replaced" (despawned/respawned), it just get's told where to go to next.