I began rigging this character using the Skelegon tools in modeler Setup > Create Skelegons. I always begin my skeletons from a generic 'start' bone, that I create at the centre of gravity of the character (usually into the mid section).

It should be noted at the start that Skelegons are not bones — They are specialised polygons that are simply designed to allow us to layout positions and locations for bones using Modeler. The nice thing with Skelegons is the ability to store the basic rig structure with the model.

The Spine

Since Skelegons have no normal to define the direction they face, the orientation of a bone created from a Skelegon can be carefully set up by imagining the Y axis as coming perpendicularly from the viewport you created the Skelegon in — I build the main spine from the back or front viewports, so that the Y axis points along the Z axis.

The Y axis is important — it is also the axis where the Pitch orientation revolves around, which LightWave uses for such bone features as joint compensation and muscle flexing. It is generally a good idea to use the pitch on any joints that hinge such as fingers, elbows and knees.