how are game files read?

[Brenhein]

Those files are for MODers (modification) that edit the game code to make it better or add stuff to it without having to make the game all over again. Game developers usually make those files for this purpose.Editing this file should only be done if you are 100% sure of what you are doing. Make sure you back up the file before you edit!(THIS IS VERY IMPORTANT)
Answering your questions:
1. There appears to be no specific language but the developer's.This means that the game is the only thing that understands it.
2.Notepad is all you need. If you want to mod a game, try googeling your game name + version + "MOD tutorial"
3. All animations are enbeded IBN THE GAME and require no resources outside of the executable.
4. It is 100% legal to do this - especially if the game has the file at all!