I'm slightly puzzled by this. How was the model orientated when it was imported? Was it lying on its back, side, front, or standing up? With regards to what's in the screenie that's a common problem when you parent a mesh to an armature that has a different orientation. In other words... if you press "
N" to open the object properties panel
check the "XYZ" readings of both the mesh and the rig, if they're different that's why it's flipped. Correcting this could be tricky depending on how the MD2 script works so you'll need to do a test. First orientate the mesh properly and then
Ctrl+A to
apply RotScale to ObData, that 'fixes' the orientation issue, then parent the mesh to the armature, this should stop it doing what it has.
I'm not entirely sure what's happening when you say "only the bones get copied" because if you're doing this correctly you're not copying "bones" but the "pose" they're in. I see you have the action editor open, but I don't see any keyframe markers in there (little yellow diamond shapes) - which is what should appear - that tells me that you may literally be copy/pasting the actual bones. To do what you need to you have to add a new "Action" (click the double headed arrow button to the left of the two "Up/Down" arrow iconed buttons in the header bar) and then press "I" to "insert" a keyframe, you should then see some markers appear in the Action Editor.
I do have a video tutorial in works on this stuff but its a long way off (I deleted and old capture I had). Thanks for posting this here by the way, YouTube is really annoying for anything more than "Hi I likes ur vidos".
[EDIT] I modified your topic heading to make it clearer what the post was about, saves people having to guess