When inserting key positions on an IPO curve, the positions are interpolated through the use of Beziers. By default, Blender uses "auto handles" (yellow), which attempt to create a smooth path.

It's a known problem that in Blender, extreme cases tend to overshoot, giving poor animation results. For animation graphs, the calculation of such automatic handles should - in most cases - differ from paths in a 3D world. To solve this, a special automatic curve handle has been added, which solves the following two problems:

• If the control point is a local extrema, the handle defaults to horizontal.
• If the control point is in between two other points, the curve is prevented from going beyond the other control points.

This new handle type is now the default when inserting key positions. You can switch to normal Auto Handles with the hotkey ALT+H, or by choosing "Auto Clamped Handles" from either the pulldown "Curve" or "Point" menus in the Ipo Curve Editor.