if it's any consolation, i've been using ORK for a few weeks now, and i've experienced various flavours of the "floating on air/sinking in ground" problem too
my current configuration, which works for in-situ, as well as new screen battles (but which i can't guarantee will work for everyone, depending on... factors), is:
all my animations are Mecanim
all my character prefabs have an Animator and a Character Controller component, and nothing else (apart from an extra Event to fix another flavour of floating problem which i've been having with multiple Group members, but this should be irrelevant with regard to the basic floaty/sinky thing)
all NPCs have some variety of Movement AI set in their AI Movement Settings
all MoveAIs have a Component Type of "NavMeshAgent", and "Add Component" checked
obviously, because of the above all relevant scenes have to have a valid Unity NavMesh defined
i have "Place On Ground" DEselected in "Battle Spots". if i have it selected i usually start the battle with both combatants floating above the ground
i don't think i've got any other pertinent settings, and as i say, that works for me. at the moment
i'm not using battle animations yet, so i can't help with regard to that one (if, indeed, i've even helped with regard to this one...)