Well, some may say. that vertex animations are "olf-fashioned". In fact, they are, but compared to bone animation, they are a lot faster. So, if you are not in the NEED to give your hordes bones animation, vertex animation would be the choice if you are focusing on performance. Otherwise, if you have a lot of animation frames in your model, vertex animated models are most times a lot LARGER than bone animated files. I programmed once a character which had 20-30 animation cycles in one file with about 8-16 frames per cycle - all vertex based. The file really large, just for the animation data (and the character was lowpoly!!). So if you don't want to waste memory, vertex animations are the worser choice (but this depends on vertex count and animation frames!).
Or using bone animation in physics simulations (rag dolls?). You can do this actually.
I will answer the last question regarding animation machines later, if you wish - I'm going to lunch and I'm back in the later afternoon

Quote:
Vertex animation does not consume memory.
But what if a vertex animated file is about ~20 MB? Won't it consume 20 MB of memory? 
Cheers,
Christian