I can explain since I built the ATST.
Rotbundles would be a problem since each PCO can only contain 14 networkable/moving parts. As DJango pointed out the original walker had alot more than this and even then it wasn't perfect. So rotbundles are out. But, the process is that you use the rotating gears to make forward and reverse motions for the legs at the joints. With the animation method, the legs are broken into segments and are associated to a bone on a custom skeleton. Then every motion, for idle, walk, reverse, left , right etc, all need to have 2 versions for flat, going uphill and downhill. These animations that are done in 3d max are they exported as .baf files and the bf animation system plays these animations on the skeleton/visible mesh based on keyboard input. The ATAT is a beast and will require alot of time, the ATST alone took me over 5 weeks of dedicated time to get it working, that didnt include the complete animations or weapons.
Hope that helps.

Someone tell Bandu Ron Paul won't win!