All of the basic movement activities in Lugaru 2 are working now! Walking, running, crouching, sneaking, rolling, and jumping are fully functional. Phoenix (the Lugaru 2 game engine) uses a unique animation system that creates animations on the fly based on surface and physics information, and even the character's personality and current state. For example it is very easy to change a character's walk to be more aggressive, lethargic, cheerful, feminine, and so on. This means that all of the characters move differently, and all of the activities transition absolutely seamlessly into each other, for example running->rolling->crouching is just one fluid motion.
This system is still in fairly early development (it was rewritten from scratch last week), but it is already fully functional and shows all of the features described above!
Here is a short video showing Turner moving around using Phoenix animation (with motion blur turned off to show the animation better):