Several years ago motion capturing was only possible for big name studios due to cost. Now it seems that it is moving into the realm of indie developers due to lowering costs and better technology. I've researched it a bit and seen two major options: IPISoft and iClone which both cost several hundred dollars and use fairly cheap hardware(Kinect or PS3 eye). I was wondering if anyone could recommend any other alternatives?
If you do not want to create your own motion capture data, then there are several motion capture databases available, some of them completely free.
Long-winded answer follows. tl;dr, it's a LOT OF WORK.
I've used iPi Soft and found that it works fairly well, but unsurprisingly you need to do a decent amount of clean-up on the resulting animations, especially if you're using props and such. I've also used Kinect (albeit a year ago when the available free software was less polished), and you get the same thing there, but are very limited in what motions you can do, especially from the waist down.
Expect any of these free or low-cost motion capture systems to be a massive time sink. Assuming you have a large enough room to do it in, you're going to spend literally days working out the kinks to get a workflow going, and expect upwards of an hour for every couple of seconds of animation in order to "fiddle with it" on the PC to make it smooth and believable as an animation for a game--unless you are an experienced animator with good middleware for this purpose.
If you require relatively few animations and fairly ubiquitous actions (jump, slash, tumble, run, climb, etc), you're honestly better off spending the money for someone else's work. If you're wanting to do something more interesting, just expect to spend loads of time getting rolling. Also keep in mind that being an actor for motion capture actually takes a certain amount of traditional acting skill and a lot of dexterity and stamina. Much like voice acting, it's more demanding than you might think.
If you're wanting a presentable final animation for a game, I would recommend you at least do the trial and then spend the money on iPi Soft or a similar product. In my opinion, for a non-trival motion, a decent animator can rig a model and keyframe the animation orders of magnitude faster than you can get a similar result from single unit Kinect-based solutions.
All of that having been said, if you have the time, doing it this way gives you a lot of appreciation for the animation side of development, and you'll certainly learn a lot.