Video is a bit tricky. For this simulation was active character separated into parts and hidden in layer and rendered another one.
Current implemented rigid body in blender doesn't support deformations via armature (or shape keys), but calculates mesh parented to a bone.
Character was parented to an armature as ussual, but later I duplicate the mesh and separate it into parts for each bone. Physics calculates all active objects in a scene, even they are in hidden layer.
I wanted to use BVH data for armature, but you can use any of yours, so ...
- import BVH
- append some character
- parent mesh to armature (Ctr+P, I used "Armature - With automatic weights" for this quick test)
- duplicate character (delete armature modifier !!!)
- separate mesh into parts related to each bone
- parent parts to the bones (Ctrl+P, Bone type)
- activate parts as passive in Rigid body panel
- separated character is not going to be rendered its needed just for simulation, so the accuracy of these objects depends on a level of details you need in simulation
- BVH is from cgspeed.com motion builder version was more accurate (DAZ or MAX was somehow shaky)