I haven't seen anyone else post this so I'll submit. OK the rules are pretty clear that in the case of a standoff, a character is allowed to leave the area the next turn. But what if the character is defeated and loses a life, do they have to stay on the space until the enemy is defeated or they are killed or are they allowed to move on in that case as well???

hawgboy said:

This is the rule as you read it on Page 10 (Combat step 5):

Compare Attack Scores
The total of the creature’s attack roll and Strength is the creature’s attack score. If the character’s attack score is higher, the creature is killed. If the creature’s attack score is higher, the character is defeated and loses one life (use of an Object, Spell, or special ability may prevent this). If the attack scores are equal the result is a stand-off. If the character is defeated or the battle ends in a stand-off, the character’s turn then immediately ends.

This is another rule as you read it on Page 12 (Combat Between Characters, step 5):

Claim Reward
The winner may either force the loser to lose one life (which may be saved by use of an Object or Spell), or may take one Object or one gold from the loser to add to his own. If the winner kills the loser by forcing him to lose his last remaining life, the winner may take any Objects, Followers, and gold from the loser to add to his own. Any Objects, Followers, and gold not taken are left on the space. The turn then ends.

Combat in Talisman does never last till death, with the only exception of Battles on the Crown of Command Space. If you lose a Battle against a Character, you lose 1 Life or an Object/Gold piece, as the winning players choses. You die only if you lose your last Life and the winner may loot your spoils. If this is not the case, on your next Turn you roll the die and move as normal.

It's the same with Enemies and Enemy Spirits. If you lose the Battle (=are defeated as explained above), you lose a Life, the Enemy card stays on the space, and you move on next Turn.

Turns always begin with Movement phase and you can't stay on the same Space. On the Crown of Command the Characters don't move anymore and keep encountering each other, till one prevails.