Walking with physics

A game I am working on will have the players walking on a lot of varied terrains, and I want to make the movement of the legs and such more context sensitive. I am not really sure where to get started here, because standard animations will not do exactly what I need to do. I was reading through some articles on Lugaru, and the authors mentioned that the upcoming Lugaru2 animates walking by shifting the charaters center of mass, and the animation then automatically walks to maintain balance. This type of movement is exactly what I am looking for. If anyone can point me in the right direction, maybe some articles on the subject or something like that.

Have you seen this?

http://forum.unity3d.com/viewtopic.php?t=12828&highlight=walk

That looks very promising, thank you for the link.