I've unlocked a bunch or characters but they don't show up when I go into free play for me to choose one. My only choices are Harry, Ron and Hermoine still.
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You need to visit Madam Malkin's Robes (the shop with the large scissor signboard) in Diagon Alley. As you enter the shop there will be a lighted platform to your immediate right where you will see the entire catalog of character tokens. Those that you have collected will be available for purchase provided you have enough "money" (studs). Once you purchase them they will be unlocked and available to use for free play.
When you finish a level and go back to "The Room of Requirement", you need to go downstairs and all the way to the left. You should see Fred and George, that's the shop. You can buy hints, red brick special abilities, and characters, and also watch the little video animations you've gotten.
For more questions for LEGO Harry Potter: Years 1-4 check out the question page where you can search or ask your own question.