there are a few other thread recently posted here regarding *collision detection* - basically this is what you need, you need to test points of the character and determine if it is hitting something, then respond to that - eg. make the player stop 'falling' through the ground and set it to that point
you probably either set the grounds registration point in the middle, or your character's image is actually lower than its registartion point, thus you end up walking on your knees:P
I think it's all about the registration point. I make that mistake a lot. And the title said "Walk under the ground". Plus the default registration point is in the middle, mike probably forgot to set it to low. Happens to everyone! Good luck.
Either Registration point OR maybe you have your gravity too high, sometimes, if the gravity is too high, and you jump and the platform/ground isn't thick enough, your character falls through it because of the speed of the fall.