I think the twitching/flipping around appeared with the second demo wich you posted in your last ragdoll thread!
The difference between the first demo and the second seems to be the moree complex shapes of the body parts. They should probably be as simple and rectangled as possible!

http://www.puppenheim.org/
http://www.wuerfels-welt.de
Old Game Tutorial: http://www.puppenheim.org/MITutorial.zip
Free Game Editor: http://puppenheim.org/AlienalsWeihnachtsmann.zip
http://www.puppenheim.org/blender_starting_main_settings.txt