He doesnt do anything when I hand him the controls..He doesnt turn the airplane to assgined headings or climbs or decsents to altitudes from ATC. What is the proper way to have it set up so he flys the airplane. I have tried even using the default 737 in FS9 so I know its not a GPS problem. Any help is appreciated.

He will not fly your airplane. What you do is to hand over the comm-radio which means radio communication, not the flight-controls.RC is not a program designed for co-pilot to fly. It's an ATC-communication program which makes ATC-Pilot communication realistic.

From page 129 of the RC 4.3 manual:Co-pilot UsageAs in previous versions of Radar Contact, you will have a co-pilot at your side to help you out. However, if you would like another co-pilot feel free to change it on the voices screen. The co-pilot can take over all communications, all the flying, or both communications and flying from you, if you wish. If you want the copilot on comms, press CS-K (which is default - but perhaps you have changed your key preferences, in which case it would be another key combination). The copilot will take over from this moment on, maintaining all communications with all controllers. At any time, while the copilot has the comms it is possible for you to override him. If you want to ask clearance for a higher flight level, it is perfectly possible to do so. Likewise for requesting a weather report, declaring an emergency, or any other type of communication you would like to have. The copilot will restrict himself to acknowledging all comms from the different controllers to your aircraft, including setting the transponder. The default key combination to make the copilot fly the plane is CS-M. Remember that the autopilot has to be engaged and slaved to both heading and altitude. Otherwise, the copilot will not be able to fly. If the plane does not have the MS autopilot capability, the RC co-pilot will not be able to take the plane.----------------------end quote-----------------There have been some updates to this and more is explained in the manual regarding what the copilot can do and not do and where on page 130. The RC copilot functions via the autopilot interface using "standard FS control interfacing" thus it will not work in some proprietary aircraft interfacing such as the PMDGs. The copilot's functions are restricted to heading and altitude and those must be engaged with the AP enabled. The copilot will not fly the aircraft while NOTAMS is in effect. In addition for initial departure and the final stages of arrival the copilot will not accept control or will hand it back to you in the latter case.Search the manual for "copilot" to get all of the information.