Hi there Wayne, I'm pretty sure I've followed your steps word for word in the video above but whenever I link Melvin into my scene he appears but without any textures (just a matte grey colour). When I open the source file he is absolutely fine, only when I link him into a scene do I have this issue.
Have you come across this before and if so how do I fix it?
Thanks Wayne, I am a dingus! I just thought it would be a cycles material but you're right, I just needed to switch over to Blender Render and now it's working just fine!