This works perfectly for me, and I used the Infinite Use Skillbooks mod with it. No problems at all.
I'm wondering if this works with multiplayer, though. I'm thinking of buying a copy of the game for my sister, but she's pretty terrible at games, so I figured I'd boost her character's stats. Would she have to modify the Characters.txt on her end, or would the game be using my Characters.txt since I would be hosting?