Ill try to asnwer as good as I can, but since this aint really my sector someone else may give better answers.
I dont think you can alter more than the head within FPSC, so you need a 3rd party tool.
I think that Character Studio is able to import the animated and rigged character directly fomr a .x, but someone else needs to confirm that.
But if that isnt the case you dont have to start over completely with the character. If you are using Milkshape (wich I use) you can import the .x under Tools/DirectX Mesh Importer.
You will have to re-rigg it to its bones wich can be found here
http://forum.thegamecreators.com/?m=forum_view&t=125135&b=21
Then you can probably delete all keyframes and start over.
And if you only want a character wich walks around and the put his hands over his head you would only require the animations:
walk
idle
hands over head idle
hands over head walking
The rest is left for scripting, I think there is a command like playanimation # or something.
And AI has nothing to do with the model itself, AI is controlled by scripting so you character would still move and behave as before (if you dont change anything in the script

)
I hope I gave you some answers.
Good luck!