3D models for Granny library by RAD Game Tools, Inc.
These files are used [ : mainly? ] for avatar models (PC, NPCs, spirits, …) and for inventory items (: anything more?). They can contain meshes, textures and animations, but it seems that Lionheart has animations in separate GR2 files, probably to ease sharing the anims between different models.
The file contents seem to be obfuscated - while the strings reported by the GR2 viewer aren't visible anywhere in a GR2 file, from the sheer amount of zeros it's clear that majority of bytes is not compressed nor encrypted. Possibly some file chunks are compressed/obfuscated, while others aren't. Or maybe it uses obfuscation algorithm which skips over zeros in order to avoid revealing a XOR key … My guess is that it IS a XOR key :) and common cryptanalysis techniques with cribs from the viewer would be enough to recover it.
In any case, the viewer reveals loads of interesting information about GR2 files, including structure definitions and their content.