I will have to post some pictures of the first one I modded with this, POC Lowlight, but here's Stalker for now. Its really pretty simple. Most of us have some crappy 25th style arms lying around with no better use in sight for most. I came up with this after buying the Marvel Universe Extremis Armour IronMan, who has the double jointed neck as well.
Drill out the neck after cutting the post off flush with the collar.
Cut the arm off at the sleeve, leaving as much as you need for the proper neck height needed.
I went a little taller than normal on this one because he is getting a nice web gear combo and I wanted to make sure it cleared his head.
Glue the arm joint to the base of the neck. I find it helpful to rough up both sides of the parts with some sand paper to give the super glue a better grip.
After letting the above parts dry I take the exposed arm plug/joint and cover it lightly in lotion (liquid soap, vaseline, and others work just as fine)
Fill the hole in the figures chest with hot glue,not too much! Just enough to fill that area, not the chest cavity.
Give the glue a couple of seconds to start to get tacky and then push the new neck post into the center of the hole. At this point I usually turn it around 360* while the glue is setting to make sure everything fits properly and to form an even seat.
Let it set for a few more minutes and the glue should be hardened enough to remove the post ( should come out with some pressure and a light pop if the glue made a clean seal) and clean up any left over lotion. If the glue isn't perfect take the hot glue gun and re-melt the neck seal and try again. Alternatively you could use epoxy or green stuff.
Combine this mod with the double jointed wrists and you've got one hell of a pose-able Joe.

Just to show how the glue should look if it dried correctly