PRB: 3dsmax3.1 crash into nel_material.ms
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1) Verify your maxscript.dll and paramblk2.dll version number is "3.1.0.1". If it is "3.1.0.0", get an update.
2) Try to delete the content of /matlibs and restart 3dsmax.

PRB: Trouble using Physique modifier in Character Studio >= 3 under 3dsmax >= 4
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Check the line USE_2.2_RIGID_DEFORMATIONS=Yes is present in the file maxdir/plugcfg/physique.ini (Case sensitive!)