weight paint is all or nothing and i don't want it to be

…the title says nearly everything. i downloaded a model, i don’t remember from where, just one of the blender download sites, and started rigging it, but as soon as verticies are in the group, they’re deformed completely!! …wtfreak!? blend: http://www.pasteall.org/blend/1263
(in the blend, i’m aware i have no foot bone yet, it’s the hip i’m working on, specifically the smoothing out at from the thigh to the hip, and i can’t make it smooth because it’s doing all-or-nothing.)