A Few Problems with Bone rigging

[heyvern]

You either need to read up on Bone Offset or use binding for the points.

Bone Offset:
You pull your character apart on frame 0 making sure the bones cover the whole mesh of that part. Then using the Bone Offset tool you put the bones back into proper position.

Bind Points:
Select the vector layer. Select a bone, select the points, press space or hit the bind points button at the top.

It doesn't matter what you do at this point. You must use one of these options. The bone for the arm is too close to the body. There is no way to do it otherwise.

-vern