It still might be buggy, that's why it's only version 0.97 for now. You can turn off the caterpillar by just having only 1 party member (there's a prob with it right now, I'll fix it in the next release). Your chars get invisible if they "die" (kinda ghost effect) or if you just set their transparency to true/opacity to 0/character spriteset to none.
About the centering bug: I'm not sure if it has to do with the centering of the characters. I'll look into that. I've had problems with that before already. =/
@Irockman1: Someday, yes. You will have 3 types of weapons: close-combat (melee) weapons (sword, lance, etc.), ranged-combat weapons (flail, boomerang, etc.) and projectile weapons (bow and arrow, harpune, etc.)
With skill it'll be similar: Close skill (obivous), Shooting skills (arrow type, etc.), Area skill (hit enemies around you) and ranged skills (game freezes (OR NOT, you can set it up), you choose to attack any enemy on the visible screen or within the skill range). Also skill will have the option of "Explosion on impact", so the can damage enemies around the target as well.