So Alleviate allergy basically lets you ignore an allergy, so does that mean you can have a vampire walking around in broad day light with a big grin on his face? Also will it work on things like possessed wickermen possession vessels, fire, and water spirits?

Rules-as-written? Yeah, that probably works. In my game? I'd say those aren't conventional allergies and thus it doesn't work. That's just me.

Ditto.

Well, according to RAW, vampires may already walk out in the sunlight without serious problem, although with some difficulty (-4 to all actions). That's a lot better than the usual "burn as soon as the sunlight touches you". If this vampire is an adept with 4 initiation grade and adept centering, he's perfectly ok.

Now, for the allergy thing, i don't see why you couldn't. If the critter has regeneration, however, i wouldn't allow him to regenerate even when under the circumstances because alleviate allergy only remove its immediate effects.

It would freak out the players. I say 'yes.'