I've searched around on the UDN forums and someone provided a very simple way to create a cel-shaded look. I've slightly modified it to change the lighting divisions from 3 to 2 (Wind Waker) and removed the strange material-based edge detection it had previously. I plugged in the diffuse multiplied by 0.3 into the emissive to give it a bit of self-illumination thus making it more flat coloured.
New Animations and Animtree set-up
I've added a few extra animations to incorporate in Penguins movement and for use on the ladder. Here's a screen of the animtree as it is, but further modifications may be needed. (you probably wont be able to see any of the node names)
Finally, the last motion speed is the sprint, which requires both the jog and fast walk functions to be simultaneously pressed (Left Shift and Q). If you're wondering, I did base it off Assassins Creed.
I added in the ladder animation. I'm trying to weigh up which is more appropriate to have, basic ladders or try out wall climbing. I've done some research into a good climbing system but the scripts are pretty much withheld by everyone who was successful, and it does seem a little complex for me to even attempt. So I kind of have to stick with ladders for now. Until I can get a good wall scaling motion; up down left and right - its boring ladders for penguin.
Basic Snow material set-up
I remember seeing a you tube video of someone who set up a shader for snow to appear on top of an object, no matter of position or rotation. So I thought it would be cool if I could implement this too, and a quick search through epic games forums pointed me towards a simple material set-up that does, on a more basic level, exactly that. And all I have to do is Lerp the diffuse with a constant snow texture and it should work every time. I tested it out on this pillar (udk's). Works on Penguin too, but its not needed on him.
So far it's looking promising, but I feel the need to continue to push and see what I can produce within my technical limitations. Then I remember my true purpose for this project which is game art, not game programming. I've got the basics set up, material functions are solid so I guess all that's left is to begin world creating. But before I begin, I strongly believe more concepting is required, so there's my next step.