Attached Link: http://koti.mbnet.fi/mmyllyma/ani2.mpg

Ho, I found a workaround. I parented both the armature and the mesh to an Empty. Now I can rotate and move the Empty and everything just works...

Still, it is criminal negligence that we do not have real "Character Animation with Blender to Idiots" guide.

Now I can focus to animation itself... 

(Link is to 1.7 Meg MPEG-2 file, one of my first tries to animation with Blender...)