I am using the Blender Game Engine to make a 3rd person game. I want the main character to have separate armatures/animations for the upper body and the lower body. For example I'd want my character to be able to jump, crouch, and run while shooting and aiming a gun. I have tried to make two armature modifiers but only my leg armature deforms my mesh.
Just use only one armature for your character.
Create your two different actions on the same armature. Make sure that no bone is used in different actions at the same time. (In your case: action one -> exclusively the upper body part, action two -> only bones of the lower half)
Last thing you have to do, is to select different Action-Layers for your actions in each action-actuator.