Character rights and fair use?

In 2001, I created a character named NecroRaver. I drew pictures of him and put them on Elfwood. Incidentally, the character of NecroRaver also makes an apperance in one of my novels.
Someone from Germany, back in 2001, liked the pictures and printed them out.

Elfwood removed the pictures (they had song lyrics on them, which Elfwood does not allow) and the guy scanned his print outs and put them on his Myspace under the user name NecroRaver (Or possibly Necro Raver. It's hard to tell sometimes.) I believe he also wants to name his band NecroRaver.

So, I googled NecroRaver a couple of weeks ago and came across MyspaceRaver as I call him. I emailed him and asked for credit on the images. He agreed and was very happy to 'meet' me.

Today he asked me if he 'could have the rights to NecroRaver'

I would ask you a little thing.
can i have the rigths for Necroraver?
I need this to make CD-Covers.
Your name comes of the cd or booklet to.
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I don't know if he wants to use the name or the pictures or both. I emailed him back saying that if we were to discuss things like that, it was best we find someone who could speak both German and English, so we don't mis-understand each other.

So, how does this work, legally? I'm Canadian, he's German, and a character cannot be copyrighted, only trademarked right, which NecroRaver is not. Legally I can't stop him from using a name, can I, but I can stop him from using the character's image or likeness, right?

Any help is appreciated.

'You' as in I alone, or 'you' as in the two of us?

Yes, I would never give him the rights, I would consider, maybe, licensing the image/name/likeness for a time, a deal, under a drafted contract.

One thing I didn't mention is that the picture that was removed from Elfwood was not the first picture of the character. The original picture of the character is still on Elfwood, with the date, and comments going back to 2001. Also, I have the line art for the pic he printed out and was removed from Elfwood somewhere, so if I have to I can 'prove' that I own the images at least.

Edit: Dude. I'm a comma fiend.