@SLEEP: (which I'm totally lacking at this point so I hope I make at least some sense...)
It feels to me like the main problem is, that the template's 2nd and 4th pic is raising its knee in order to walk,w hich lets its steps look very forced.
When you walk, you don't really raise your knees, unles you wanna step over something, you just kinda put one leg after the other.
So I'd first suggest you'd remove that, and just leave the leg straight.
Second thing is, that both the weird leg thing and the down-forward bobbing of the body make it look like it jumps a lot.
You are using 5 frames, which should give you some room for smoother animations.
Just from a theoretic standpoint (it'll always have to be looked at), it should look nicer or at least fine, if you let it go down either just once for example when you are at frame 1 or 5, or let it go down one each, so Standing is normal, first frame is one pixel down, second frame is another one down. I personally try not to let them bob forwards, because a character already will move on his own. If you let him bob forwards in one frame, he'll also have to bob back, and that can make them look a bit jumpy. but that's just how I feela bout it, it might be not that visible when they are actually moving forward.