Erm... What code?

(Maybe you didn't attach a file properly when you posted?)
Anyway, to simply delete the sphere you can just call "Delete Object
ObjNum", where ObjNum is the sphere's object number.
To insert a walking character so it will appear instead of the sphere, replace the line of code "Make Object Sphere
ObjNum, Size" with "Load Object
"Media/MyModel.x", ObjNum". Specify your own file path (doesn't have to be a .x model, it can be a .3ds instead), and use the same object number as the sphere used (e.g. you had the sphere as object 10, so load the 3d objects into slot 10).
In a nutshell:
Load Object "Media/MyModel.x", 10
Sync On
Do
If Upkey = 1
Loop Object 10
Move Object 4
else
Stop Object 10
endif
Sync
Loop
Obviously you'll need to change this a little to make it fit properly into your own code - would have tried to adjust your own source, but I'm not much of a mind reader!

Hope this helps!
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