I went to a cave in Freezeezy Peak which had a walrus, two gold feathers, an orange Jinjo you have to save, and an ice key.
Does anyone know the function of this ice key?
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Looking at the Banjo Kazooie's wiki, it seems like this key does not have any use at all in Banjo Kazooie, whatever what is the version of the game.
In Banjo-Kazooie, the Ice Key is found in Wozza's Cave in a large alcove, although the room is blocked by an unbreakable transparent wall of ice. Entering the code "CHEAT NOW YOU CAN SEE A NICE ICE KEY WHICH YOU CAN HAVE FOR FREE" on the Sandcastle floor in Treasure Trove Cove will dissolve the wall, allowing the player to access the key. However, as with the other Stop 'n' Swop items, it has no apparent function in Banjo-Kazooie.
However, having the item on your Banjo-Kazooie save file on the XBOX version will allow you to unlock content in Banjo-Tooie and Banjo-Kazooie: Nuts ands Bolts. In the first one, you will be able to use it to transform Kazooie into Dragon Kazooie by following different steps. In the second, it will allow you to obtain the British flag.
In the original Banjo-Kazooie, collecting the Ice Key does nothing... Until you then play Banjo-Twoie, where it unlocks a large Ice Vault that holds the Mega-Glowbo. The Mega-Glowbo can then be used in Humba Wumba's wigwam at the entrance of Witchyworld to transform Kazooie into a Dragon.
In the original game and Banjo Kazooie on Xbox, the key had no purpose. It was an unimplemented feature.
The Ice Key in the Xbox version of Banjo-Tooie and Banjo-Kazooie: Nuts and Bolts does have a purpose and it involves obtaining the key on Banjo-Kazooie (on Xbox). Here's how it works:
Any mentioning of a Banjo-Kazooie game from this point on relates to the Xbox versions of them
There is a Banjo Kazooie game pak in Banjo Tooie The game pak is in Jinjo village, right of the entrance near the grip grab ability. As the Wiki words it:
...the Banjo-Kazooie Game Pak contains the Gold Mystery Egg and the Ice Key will automatically be added to your collected Stop 'n' Swop items if it was obtained in Banjo-Kazooie (XBLA).
You must collect the key in Banjo-Kazooie first, then pick up this game pak. After that, you can do this:
Take the Ice Key to the Waterfall Cavern in Glitter Gulch Mine and use the Talon Torpedo learned from Jolly Roger's Lagoon on the Kazooie boulder in the water. Swim through the tunnel that opens up to a large room on the Icy Side of Hailfire Peaks containing a gigantic ice safe. The key can be used to unlock the safe, revealing the powerful Mega-Glowbo which can be brought to Humba Wumba in the Pine Grove to transform Kazooie into the fearsome Dragon Kazooie.
Ultimately, the key unlocks the ability to turn Kazooie into a Dragon.
In Banjo-Kazooie: Nuts and Bolts the key (if collected in Banjo-Kazooie) also unlocks a British Flag that is inside of a crate on top of Boggy's Gym.