In A7, I've read through the manual about the various animation blending functions, but I've never found if the engine is capable of running animations in "tracks".

i.e - I have an NPC with a walk animation. It also has a run animation. The NPC also has a separate animation for a dialog sequence. I want to use the dialog animation with the run, or walk animation without having to create separate animations of the NPC talking while walking and running.

I know in Unreal3, we had an animation tree that handled this for us.

What do we do in A7? Any input appreciated.

bones animation using anm_add ?

That's what I looked at originally too Xarthor.

Does A7 need a specific skeleton for bones animation to function correctly? One of our artist seems to think so but I haven't researched it thoroughly.

The example in the manual is already that what you are looking for:

http://www.conitec.net/beta/aent_animate.htm