OK, I can already feel the flames, but . . . I've looked through the book and can't find directions on how to dismiss a character from my party. I found how to create a new character, but not just how to get rid of one. I want to trade out an NPC and can't figure out how to pull it off. Directions would be greatly appreciated!

if you want to dismiss an RPC go to inventory and look up, you'll see their character picture, beside that is a small arrow like thing. press it and it will ask whether you want to dismiss that RPC. you can only have 2 RPC at a time.

AFAIK, you can't dismiss your created character in the middle of the game.

You can replace your own characters. When you're in the inventory, you can click on the name to get to the personality menu. Somewhere there is the replace button.

To replace an RPC, you have to dismiss him (see Kakeros reply), and then hire the new one. You can't replace RPCs with own characters.