If you want him to walk in place, Turn off IK and zero out the Hip X & Z translations for all keyframes. And you probably would have had better and faster results if you had translated the figure's Body in the first frame to get the figure at ground level rather than using 'Drop to Floor'. The latter translates the hip, which is already keyframed in the animation, while the former moves the figure without affecting the other data in the BVH. Translating the Hip could have caused your gigantic step problem.