So I wasted a bunch of time in futile frustration with no idea what's not right. CHECK THE NORMALS! If a newton physics project isn't working the way you expect check the normals of your models. So I get past that hurdle and the bones are reacting properly... but they are all ending up in weird positions and NOT on the floor. <sigh> So... the other thing to check on explode/breakable objects is the rotation of the bones for each part. Make sure they are 0,0,0. Make sure there is no teeny tiny rotation on any of the darn bones. I am such a careless "boner".

So the key to using Newton is to make absolutely sure everything is just right before experimenting. Once you have that it's so much more fun playing around with the different settings.
-vern