So it looks like my assumption was correct that manipulating the individual segments directly, somehow bypasses the physics calculations.
I actually managed to rig my model with configurable joints and make the joints stable ( no jitter ). The biggest gotcha that I found is to make sure that the colliders that are attached to the rigid bodies do not intersect. If they do then there will be joint instability (jitter).
Now that I have the joints working and the slip problem solved, it is on to finish the simulation. I have a basic walk almost finished, still needs some tweaking.
I will post some screenshots when I can