I have a problem animating bone length, seems to warp the captured geo. I use this in XSI for limb stretch animations. Any way to do this in Houdini?

It's supposed to affect the capture region. If it didn't then your stretching bone wouldn't affect the deformation. In any case, if you want to disable it (which I don't think you want to do), just dive into the bone object and adjust the expression.

This may show the problem more clearly. It is probably due to the way regions capture geo. I hope there is a simple solution. Scaled vs. unscaled bone.

changing the bone length scales the capture region non-uniformly - so what you're seeing is correct…
what you might want to do is change the uniform scale on the bone instead

NOTE!!!!! NEVER change the bone's scales parameters non-uniformly here there be dragons!

Thanks Arctor, but actually I need to scale it by length to get the strechiness.

Well, this may be super late, but I ran into the same issue and I think I was able to find the solution.. Indeed, this has to do to how the capture regions are affected when changing the bone lenght. If you turn on the capture region display, you will notice that as you change your bone lenght, the cylinder inside the capture region “pill” changes, however the caps do not

To resolve this issue, simply adjust the Deform top Cap and Deform bottom cap channels under the Capture–> Deform region tab. You can eyeball it, but you could also drive it with an expression once you find the magic number

See the attachements so that you can see the parameters you need to adjust in addition to the bone length

Hope it helps!