I started the chapter on creating the clusters again incase this was the problem and followed through the tutorial. Ths same thing happened again with the skeleton coming out of Melvin's body.
Again I played around for ages and found that when they had been constrained some of the clusters had translated when they needed to be at 0. It was really that simple! Grrrr.
Here you can see the local control working so that his hips rotate.
However, I also want him to be able to twist easily without over rotating, so I set up an extra attribute in order to do so:
It is probably not very clear from the image, but this shows the twist working:
And here is the rig as it stands, with leg, arm and body controls:
After doing this I really want to learn how to set up the hand joints to finish the body completely. I have decided not to focus on weights in the body until I have downloaded Maya 2011 so I can use the newer Paint Weights tool, which I will hopefully have and be able to test tomorrow.