I, too, was hoping to use the Kinect to animate an avatar, but am dealing with the same problem of having more bones than sensors. I am using FAAST to acquire the sensor data, as described here:
http://kb.worldviz.com/articles/1584.
The Kinect presents a potentially low cost option for motion tracking, and using Motionbuilder and Live Characters greatly increases the cost. Is there were a low cost way to animate an avatar using the Kinect? Thanks.