Can a character be turned to a toad while on the Valley of Fire? and if so,what then happens? are they considered to have lost their Talisman and do they have to turn back to the Plain of Peril?

Turning ino a Toad on the Valley of fire could be possible if another character has a spell to do so.

You only need the Talisman to ENTER the Valley of Fire so once you're there, you can ditch it.

If you turn back, you will need to get another Talisman but if you enter the Crown of Command, I don't think you'll be able to cast the Comand Spell while you're a Toad, and the objects and followers you had will be left on the Valley of Fire which can be picked up by another character.