Attached Link: http://www.youtube.com/watch?v=aSDupAqQJtI

My intention is to create a smooth transition from a pose on frame 1 to the starting pose of the walk cycle following a path.

You might need to know that when I make my poses I strictly use the hip's xyz translate/rotate and use only the xyz rotate part of body. i wonder if this is causing it.

Attached Link: http://www.youtube.com/watch?v=5DJnwaGWMWk

The first one seems to have a camera jerk that makes it hard to tell what the figure is doing.

In the second one, the getting-off-bed moves are really nice; excellent timing
and good moves.   The switchover to the walk looks like a spline problem. 
Try putting a spline break on the whole figure just after he stands up, or perhaps
cut out some keyframes during that interval.

I took a look on the spline and yes, the spline shows an arc but if I manipulate it, its very hard to correct it.

Hmm... let me think of another way.

Alternatively, see if you can find the keyframe that's "pulling" the arc,
and simply eliminate that frame.  A quick and crude example above.

Edit: Best to move the "puller" up and down first, to be sure it's the culprit. 
Eliminating a keyframe is not an undo-able action.

After I selected the first frame of the walk cycle and saved it as a single pose (pose A) in the pose folder, I deleted the xyz translations of the hip and body and saved it as another pose (pose B). Then I saved the entire walk animation into an animated pose. I opened the original animation and created a second figure and applied to it pose A on frame 50. I colored it blue to separate it from the original figure 1. On figure one I applied the pose B and manipulated the xyz translation and rotation to slightly match the blue figure 2 on the same frame then applied the animated pose on frame 51. 

The result is this video:

http://www.youtube.com/watch?v=2IkqrAfQYVA

in scene 1, it's sitting up and scuttling over to the edge of the bed, which is well-done IMVHO.
I would cut to scene 2 when it starts to stand up outta the bed.
cut to scene 3 as it goes thru the typical intention movements of going from a
standing pose to a walk.  (watch somebody get up outta bed and see how the
body sways and shifts as they slowly get their balance, prior to walking).
then I would cut to scene 4 when it starts walking.  more shoulder slump and
more forward bending of the abdomen and neck.

Well, thanks for the compliments!

I am trying to make things the hard way to see how far can I make my animations so far it hasn't failed me and I would definitely cut the scenes to more interesting camera shots once I master it.