i bet someone at work could have answered you that 
technically: assets from C1 should work in C2 most of the time but animations might be broken. also the materials are broken, hence the texture format has changed and C1 textures look too bright in C2 (colorspace changed for C2).
legally: including stuff is a bit risky if you don't own the rights, usually though, crytek is pretty relaxed (say, c2 mod with a few c1 assets). also you might think about checking if those assets were available in the free c1 demo before you include them in a mod. redistributing freely available stuff looks nicer 
I bet they could've, but i wanted to know now
Cheers for the reply, i may just switch back to the editor for Crysis 1, save me faffing about.
The resourse compiler for C2 builds is slightly diferent from C1, or other projects.
In theory, you should be able to load the .CGF's from C1 in C2, materials as well but they will look totally wrong since we changed a lot of stuff and some shaders got renamed, changed or made obsolete. (example, we don't use metal shader anymore, metal goes on ilumin like the rest of the stuff)
As for CryTIFF's you souldnt have a problem since it's the build their on that generate the DDS's, so the RC do it locally.
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