Players will get to choose what character they want to be and the character will have a custom model I want to know how I can save this to the Extended Players properties? I'm assuming NBT? I was also thinking maybe I could just create a folder in the world named Characters and then it would save each Player that joins the world and what character they selected.

Here's a tutorial on IExtendedEntityProperities: http://www.minecraftforum.net/topic/1952901-eventhandler-and-iextendedentityproperties/#entry24051513

 

Like diesieben07 said, that's the easiest way to add extra information to existing entities (and yes, it saves to NBT).