OK these two things are related.
I have figured out how to model, uv and link a simple mesh to an armature.
Now when I try to make my character a dynamic actor it flies off the screen.
Select your character and enter face mode by pressing “F”. Pull up your “Editing” buttons by pressing F9. Now select all your faces and under the tab labled “Texture face” deselect the button labled “Collision”. Finally near the bottom click the button labled “Copy DrawMode”.
The reason this works is that your dynamic object is resolving collisions and is basically colliding with itself. Shutting off the Collision flag on your characters faces solves the problem of self collision.
Also dont forget to turn of “Actor” and “Dynamic” on your armature as suggested by QNev.