Interesting. I'd like to see what this becomes. Just a bit of critique, and a questions.
Firstly, he moves too fast. You should probably slow the guy down a bit, and shrink him too. This is obviously planned for the future if you intend to turn this into an RTS, and probably even for an RPG. Secondly, his walking animation sometimes seems to bug out on me. It may be just my computer (which is very possible), but sometimes he just stops moving his legs while he's moving around.
Actually, I just figured it out. Try holding down the mouse and moving him around, then stopping. His legs stop moving. Then if you move the mouse only a small distance away, he won't move his legs for some reason... Though he will move around.
As for my question, I was wondering what was up with that red square that you can pick up. The thing that baffled me most about it was how it just goes back to where it used to be if you try to use it/put it down. So... I guess "What is it?!" will suffice.
As it is obviously fairly early in its developmental stage, I can't say that anything is strictly BAD about it, nor is anything really wrong with it for the same reason.