If you have two characters one with 0 STR who has stealth and the other with 1 or higher STR can both characters participate in a challenge, allowing the 0 STR character to use its stealth?

Yes. As long as the 0 STR character has the correct icon there's nothing to prevent him from joining just to use the stealth.

A good card that makes use of this is Former Champion designed by Tzumainn.

Thanks for the help.