So I've been using blender for almost a year now and have been having the same issue for a while. I've watched many videos about rigging your mesh with bones so you may animate it. I've followed the blender tutorials precisely, down to the last little detail. But for some reason when I try to pose my mesh for animation, the bones cause it to twist in odd positions.
I've parented with automatic weights and had to set up the vertex groups myself (I found this was the best way) and I find that I can make the finger bones work perfectly and naturally. However when I set my vertex groups for the Hand and Forearm bones, everything messes up. The mesh seems to bend the wrong way, twist around and it even seems to be scaling itself somehow. Even if I delete those vertex groups, the same issue still happens.
I've tried many, many different ways of rigging but nothing seems to be working. I am also having this issue with the head bone. (each of my bones are labeled based on what they are to be moving)

I've used every blender version since 2.5X (I do not remember the exact number, 2.54 I think it was) and have had the problem with each one. I just recently got 2.63 and it still has the same issue. I am unsure if there is a small thing I am doing wrong or if this is just an issue with blender itself. My boyfriend has also experienced this issue.

64 bit OS
Windows 7 Home Premium(service pack 1)
Mobile Intel(R) 4 Series Express Chipset Family
--These should be the specs asked for on report page.
The extra clothing items were not parented to the bones, just the 'person' mesh.
If you can tell me what I am doing wrong/give a solution it'd be great. Thank you.