If you want the knees to bend, you'll need to add a Knee Bend morph to it, since the hip needs to run all the way down the middle and thus you can't have shins (else they would have to be welded to more than one item, which works in preview mode sometimes, but hoses the render). So what you do is build 'Knee Bend' MTs and if you want to get really fancy, you can add a null body part for each shin (a part with no geometry) that is an ERC master to the knee bend morph.