One of the members on here (the only member to successfully implement characters, as far as I'm aware), AkcayKaraazmak
, typed up a guide on exactly what he did to get 3D characters to work for his game. It's floating around somewhere, or you could try sending him a personal message.
As for the 3D section of VS, yes it's broken in the current public build & no I don't have an estimated release date. I asked Simon for one the other day / week & he just said he wasn't sure when the next release would be. They are currently working on something at the minute, as well as the new GUI.
By the way... does the slowdown you mentioned always occur or only when you have 3D characters loaded? Does your machine lag in any of the demo games available on the page where you downloaded VS from?