Armature follow curve not working properly

I’ve spent hours… literally trying to figure out what is wrong here. I could’ve keyed the whole thing by now, but I’m still wanting to know why this doesn’t work.

Using 2.49

I had some old game characters that I am using to mess around with live action/animation stuff. So I grabbed the characters and their armatures appended them to my scene scaled them applied scale and rotation and then re-attached the armatures to the mesh.

So then I took the first smaller character and tried to do both the stride method and the strait curve follow method. Neither work. If I parent only the armature to the curve the mesh gets left behind and goes crazy. If I parent the armature and the mesh to the curve it doesn’t go crazy but it doesn’t work right either. Adding a modifier to the transform properties in the NLA editor makes the mesh and the armature go back to it’s original scale and rotation.

blend file (sans textures) here