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This constraint simply makes the constrained object or bone try to stretch itself to reach a target. It operates similar to a stretchy version of the track-to constraint. However, it does not have it's own orientation target, so it is often necessary to combine this constraint with others in order to control the orientation and prevent flipping.
Options and Settings
OB: The Object to serve as the controller (when rigging, it is the name of the Armature Object which contains the controller bone).BO: The Bone to serve as the controller.
R Resets the Rest Length of the constrained bone to the default length (the length it is in edit mode).
Rest Length: Determines the initial length of the bone. This is automatically generated, and updated when 'R' is pressed and is not something the user usually needs to enter manually.
Head/Tail: This location constraint option determines whether the head or tail of the control bone is used as the target. The constrained bone can follow the head (0) or tail (1), or any value inbetween (giving access to the whole bone).
Volume Variation: Works in combination with the Volume Buttons (see below) to determine how much the bone will scale as it stretches.
Vol XZ/X/Z/NONE Buttons Determines whether the volume (scale) of the bone will be increased as it stretches, and in which (local) axis.
Plan X/Z Buttons Determines which axis the 'plane' is in. Crossing the axis will cause the constrained bone to flip. As mentioned above, if the bone will be rotating across this plane it is best to also add a copy rotation, IK solver, or Track-To constraint in order to prevent flipping.
Influence Determines the influence of the constraint as a percentage from 0-100%. This value can be animated manually, or driven by another object or bone in the IPO.
Show Shows the constraint in the IPO window.
Key Sets a keyframe on the current Influence of the constraint at the current frame.
More Resources:
Blender Wiki Page - Stretch To