The book of the skull reads:

Equipping a Character - At the beginning of each of your turns, you may remove a Hammer from the Book of the Skull and place it in the square of a friendly character that is at least 5 squares from any starting area. Also, once per turn you may give a character a power action and remove a Hammer from The Book of the Skull and place it in a friendly character's square that is at least 5 squares from any starting area. Whenever a Hammer is placed in a character's square, that character may immediately use Quake as a free action. If the friendly character makes a relic roll to place that Hammer on its character card this turn, the roll automatically succeeds and the Hammer is considered "equipped" to that character and that character can use its abilities as listed on the Hammer's card.

Does this means that if a character gets a hammer, any entity currently equipped goes away?

No. They've clarified that only effects which are listed as being equipped and have an equipped effect are equipped. (Basically, they have to have the general appearance of what you see on, say, the Pym Particles card.)

I see some wiggle room for WES but this is essentially the rule Harpua is pointing too...

From the WES-EAC
The all caps on "EFFECT" seems to be specifically excluding "The Book of Skulls"

Are you talking about this addendum:

Because it indicated that it effects things that use the "equip terminology." How does that not include the BoS (or the Millennium Stone)? I would say that the word "equipping" is an "equip terminology."

I think their addendum is ambiguous at best.

Is there another clarification they issued on the WES forums, or is this the source of what you are saying?

*Edit* I wrote this before IceHot said anything and stepped away from my desk before hitting post

hhhmmmmm... It seems to me that "equipped" was a very poor choice of word. What about the hulkbuster parts? Are they equipped"?

And now that we're typing about equipment... the writing of Eclipso and Brainiac seem to exclude tiny characters from equipping... is this the case also for WOL entities? Are we looking at despotellis/adara's divorce?

Hulkbuster parts are Equipped. All of the WoL Entities and Jocasta were errata'd to use the new Equip mechanic Eclipso/Brainiac uses. So no, no Entities on non-standard characters. I'd suggest reading the 2 articles on heroclix.com.

Oh well... Now we know what the next "once-a-week-question" is...

It's going to be confusing having two different mechanics using parts of the same terminology in different ways. It's not a bad as the improved movement Hindering terrain thing but I still think its bad.

Hammers are "equipped" but not "Equipped".

There, feel better?