1. For this tutorial we took the model of Han Solo. First you must scale the character. If you want to use several characters later in a scene, make them all the same size, because it's annoying to rescale a character when the mesh is linked with the biped object. 1 Unit = 1 cm.

2.Turn the arms like in the picture. Then freeze the whole mesh.

3. Create a Biped object. Make it the same size as the mesh. Change the root name from Bip01 to something other (eg. BipHS) so you won't have any problem when you want to merge the character in another scene.

4. Goto the animation panel. Go under General and activate the Figure mode. It's button with the line man on the left.

5. Then move, rotate and scale the Biped's bones/part till it fits with the mesh.

Tips: Move first the Biped root to the right place. Then adjust the legs and feet. Then the spine, then the head, the arms. and at the end the fingers. Most meshes are very symetrical, so press the button to choose alos the other symetrical object. (eg. left arm and right arm) You must press it each time you've selected something.

6. The most difficult part are the hands and fingers. First you should scale the hand objects. The move the fingers, you can move the first part of each finders. Then scale the fingers. Because it's sometimes very difficult to see where the fingers are, you should use the perseptive view with smooth and highlight. When the bones are right you shouldn't see to much from the green or blue of the fingers, only the grey of the frozen mesh.

7. When you are finished, it should look like in the picture below. Unfreeze the mesh.

8. Now it's time to apply the mesh over the biped skeleton. There are two ways:

a) Normal linking: Select the mesh part and linked it to the nearest skeleton part. You should use this method as often as possible. This only goes good when the mesh part is nearly as long as the bones.

b) But sometimes the method a) wouldn't work, because the mesh is bigger then the bones. In this case use Physique. Choose the mesh part on which you want to aplly the physique modificator. Clik on Physique in the modificator panel . Now clik on selcect Physique root. The choose the bones part which is nearest to the mesh. E.g. : If you want to skin the hand choose the bones part hand or fore arm, depending how long the hand is.

9. Now you must chek if all vertexes of the mesh parts have been assigned to a link. Make it so:
Choose the mesh part. In modificator panel, activate the sub-object mode in Physique. Then choose Vertex. In Vertex type clik on the red and green cross to deactivate them. Now choose all vertex in the mesh. If nothing happens, there is all right. If blue crosses appears, you must assign them to an link. For that choose all vertex that must be assign to the same link. Now activate the red cross, the other must be deactivated. Then choose in "Blending Between Links": No Blending. The clik on "Assign Link" and then on the nearest bone. Now the blue crosses should become red. Repeat this until there no blue crosses when you selct vertex.
That's it.

10. Hide all Biped objects expect the root. Now save the file. Be sure you havn't created any foot steps when saving. If you want to test the character create some foot step and assign keys to them. Watch it. The close the file without saving. If you create foot steps, it will be very difficult to move the charater later, eg. if you merge it in another scene.

Important note: The author is not a natural English speaker and there is a high chance of mistakes in every way. Corrections and comments are welcome.