Simply driving the animation of a simulated biped/ragdoll is by far the easy part, all you need is a physics engine that supports motors.

The hard part is developing controllers which control the target states of the motors in order to achieve certain goals (such as staying balanced).. this is the key part of NaturalMotion's stuff as far as I can tell, they've developed neural nets which drive the physics-based animation.

Here are some good materials:

Beyond Ragdolls: http://www.mmandel.com/blog/?page_id=33

Dynamo: http://graphics.cs.brown.edu/games/Dynamo/

Character Physics and Animation/Physics and Animation: http://pseudointeractive.com/technology-research.php

Simbicon:http://www.cs.ubc.ca/~van/papers/simbicon/simbicon.html

SimulBiped: http://mrl.snu.ac.kr/research/ProjectSimulBiped/SimulBiped.html

GRhodes_At_work, here is the link and it's 29 pages long. While I didnt read the whole thing, they are discussing details and yes I understood what I read, so that must be simple at least in the beggining.

http://vrlab.epfl.ch/~boulic/Publications_html/2004/Preprint_Versatile_walk_engine.pdf

Thanks for the links GRhodes and raigan I'm checking them...