The sprites are "dynamic" : that means that only the current frame is loaded in VRAM (opposed to static sprites : all frames are loaded at the beginning of the scene). That supposes that it's quite fast to load them, since you have only a 1/60th of second to load the frame. Usually, that means that frames are not compressed in the ROM. So I'd suggest you look carefully into the ROM, using Tile Molester or anthing related with proper config (4bpp).
It can also means that they are first decompressed in RAM, then loaded from the RAM, so you can try to make a RAM dump and look into the dump file (there are things that could be gfx around pos FF2E00, for example). If you find gfx there, it'll be easy to find the part of the code that decompress gfx there.
A good thing to know : frames are usually made of several sprites (from what I've seen plaing the game with Gens, they are made of 2 32x32 sprites). A 32x32 sprites is made of 4x4 = 16 tiles, ordered from top to bottom then left to right (whereas map tiles are raster order : left to right then top to bottom), so they are not always easy to track. If you don't succeed, you can make a dump of the VRAM : the chars tiles are tiles from 3A0 to 4FF (multiply by 32 to have the VRAM offset), then do a search in the ROM for some bytes you picked in the VRAM (be careful : some emulators don't have the wrong endianness when they dump the VRAM).
For the record, what I did :
I read into the LTT that there were compressed gfx at position 0x3986C, 0x398A0 and 0x398D4, so I launched gens-r57shell mod and made a breakpoint for reads in the ROM at these pos.
I saw that these addresses were read by the program at offset 4AB6. By studying the stack I came to the conclusion that the decompression routine starts at 2F0. The source offset is in register a0
I made a breakpoint for execution at address 2F0 and noted all the values of the register a0. Here's the list up to the first game screen. Here are the pos : 3861E (SEGA logo, it's not the offset in the doc of LTT weirdly), 3DF3C, 3986C, 398A0, 398D4 (title screen), F654 and
F668. The last twoaren't listed in the LTT doc, so they are worth a try with their tool. But it's quite unlikely : I played some time after that (up to the appearance of Friday) and no other call was made, so it'd mean these address contains all of the NPC frames. But I didn't see large portions of gfx in RAM.
So my bet is that sprites are uncompressed.
edit : there is uncompressed NPC (old man) gfx in ROM at 17E600. Nigel is around 123850.