OK, here it is. Not perfect, but pretty much believable.
If you need it to stay on the ground, add a static plane to the ground and set its collision margin to 0.01

Better post the prop itself than explaining :)
I'll do it a bit later....

Here is that picture that was meant to be attached. I seem to be having some issues uploading an image to the forums.TinyPic Link

iClone didn't crash this time. The links phased through each-other but I think this is do to poor placement of the point-to-point constraints.

As you should be able to see the links separated in some places.
I don't understand the placement of the point-to-point links. Where should I place each end?
Also where do I put the dummy I attach everything to? I was unsure on this part.

Thanx for that! :D (Though it does not work as convincing as your chain does...)





Toystorylab on Vimeo :     Crassitudes (my "Alter Ego") on Youtube: 

Would be cool to have a chain like this (a bit longer without the ball)

I did not do anything really special here (as the mater of fact the ball gave me most of the problems)

If you have a Hottest Hairstyle pack, have a look at chain necklace accessory.
You may release constrain on one end and have it straight :)

Wow, that looks quite convincing!
Would be cool to have a chain like this (a bit longer without the ball) ;)





Toystorylab on Vimeo :     Crassitudes (my "Alter Ego") on Youtube: 

Here is typical setup for the links physics:



And Point-to-Point constraint:




The result is pretty much acceptable. Just need to be very careful with animation as constraints can still very easily be broken.

Improvised flail:

Don't use self-mesh. You will stall the iClone to a stand-still. Use Convex Hull instead.
Attach everything to a dummy.
Handle is kinematic, the rest is dynamic.
Give chains some good damping ~500-1000 and use point-to-point to constrain them.
Like anything with physics it does require a lot of patience.

Thank-you for that information on units.
I applied the scale of the flail prop and then reapplied all the psychics settings I had before (dynamic for chain links and ball, static for handle.) When I pressed play, the chain links phased through each other at some points and iClone really slowed down and goes into "is not responding" when I press escape to exit the animation. Here is a screen-shot I grabbed of the chain breaking apart. Is what I am trying to do possible in iClone? If so, how?