1) Load model file
2) Polygons->Cleanup[]
3) Edit->Reset Settings
4) Toggle Other: Nonmanifold geometry to on
5) Toggle Faces with zero geometry area to on
6) Set tolerance to 0.01024
7) Hit apply
8) Toggle Faces with zero geometry to off
9) Hit apply
10) Right-mouse click frankie, and select Object Mode
11) Modify->Convert->Polygons to Subdiv

EDIT: Just saw the hand.:shakehead. I'd fogotten about this, but I had the same problem when converting the shoes. The soles just went nasty. Actually dropped the tute completely for a bit and went and did some polygon boolean modelling . Turned out, I'd forgotton to turn on Keep Faces Together in Polygons->ToolOptions->Keep Faces Together (global) or in the channel box you can set this flag for each individual extrude.

Hope this clears the frustration.
Simon