It´s without problem possible. Some characters of IoD are really broken (especially that one that may purchase experience counters / each level for one experience point less) but in general you may mix all characters. We do - but are sorting out that ones that seem to break the game to much. But thats only our point of view and only a balancing issue - but compatible they are all
The hero you are refering to is Trenloe the Strong. 1/1 5/2 2/1 5 heart 4 stamina "You need 1 less experience point to purchase experience counters" All we do is void the 1 less part & play him.
So we play with all of the IOD heros mixed in with our Runebound heros. I do not have Midnight so can't say if they are usable. However, I have not read any threads here or at FFG that says there is any heros in Midnight that can't be used.