Animation to hold an object correctly?

I have made a guitar and I don't know how to make my character hold it correctly.

What is the best way to go about this?

Do I need to make an AO animation for walking flying ect? If so then where can I get my hands on the default animations so I can just edit them?

The best way is to just put a simple script in your guitar that on attach asks permission to animate the avatar and then animates the avatar. Make it stop the animation upon detach. Your animation should just animate the shoulders, arms and hands of an avatar. I think qavimator would be good because you can add props that help you align your animation.

I actually got the animation done.

The only problem is the hands keep going flat, is there a way to make a fist at all times?

Heres what I mean:

Animation How It Is suppose to look:
http://img174.imageshack.us/img174/9122/guitarwithanimationpr3.jpg

What Happens to the animation:
http://img254.imageshack.us/img254/9484/guitarwithbrokenanimatiwz8.jpg

You can also add props in Poser.

The script has to specify the orientation of the avatar with respect to the centre of the prim holding the script, in terms of the x, y, z coordinates and the rotation. Editing these variables may also be needed to get the avatar and the prop correctly alligned in SL. Or you could adjust the size of the avatar to make a better fit (arm length, for example), assuming avatar appearance is not a consideration that matters. Be aware that the hands may not animate exactly as you wanted in SL though - and not much can be done about that.

I assume you selected "fist" when you uploaded Jim. Unfortunately no. The hand and face options do not seem to work as you might have expected. They set that hand position at the start and then defaults seem to take over. I don't know if there may be a scripting answer to this - something that might keep setting the hand position into a fist so it appeared to stay in a fist. You could try the scripting forum maybe.

Setting the priority of the animation to 4 upon upload seemed to fix it. Walking animation no longer unclenches the fist

Good - glad to hear that. I hope you don't want to sit down and play though - lol!