How to use the system as is:
Well at least, this is how I will use the Skill Challenge system, trying to use as much of the written rules as possible:
Preparation:
1. Pick which skills fit the situation (including possible special cases as per the rules). I will not look at character sheets at this stage - story decides the skills that fit, not the participants.
2. Decide on how difficult the challenge should be for the players, and which complexity it should be. Just like with a combat some challenges should be easy, some harder.
3. Time to set up DCs. First tip: Ignore the table on page 42 in the book. It is not your friend. Instead look at how difficult you want the challenge to be, and find the "need to roll" you want. I have attached my little ugly Excel sheet that I made for this purpose - but you can also just use the numbers I suggest here. (cleaned up version of what I attached in another thread.) Without testing I can't say for sure where the limits are for how hard or how easy you want this to be. My current estimate is that "need to roll" should land between 4 and 9, where 4 is mainly for easy complexity 1 challenges. The higher the "need to roll" is, the higher the difficulty - of course.
4. When you have decided on the "need to roll" number have a peek at your players' character sheets. Look at which is the lowest effective skill bonus that a player is likely to use to try to get a success. (If some players are way behind on points, ignore them.) Add "need to roll" to that number, and you have the DC for a normal skill check in the challenge. This DC will be used for all normal rolls for all characters. Note that this is basically the same thing as tweaking the DCs like many say that they will do during play - I just choose to do it beforehand.
5. Assign XP reward. If you use easy "need to rolls" adjust XP to a lower encounter level, if the "need to rolls" are high you go upwards. If you feel that this party gets higher or lower DCs than a normal party would in this situation, feel free to adjust up and down as needed.
When playing out the skill challenge I will not force players to contribute. If a player feels that it is out of character or just too stupid they don't have to take an active part. If aid another fits the skill challenge I will offer them the chance to do that instead, and add 1-2 points to the DCs to make up for it. (Depending on how many are likely to aid another instead of going for successes.)
Creativity should be awarded. Be generous with +2 awards for good ideas, and if someone comes up with a real good reason to use a skill not featured in the challenge the check doesn't really need to be hard. If the reason is just ok, then +5 on the DC is a lot better than just saying no.
This method will work on every character level. It will reward people who have made skills a priority, without making the challenges too easy for those groups. The problem with the page 42 chart in the DMG is that it is trying to do the impossible, which I think the OP has proven more than anyone can ask for.
Warning: Testing might show that "need to rolls" should be 1-2 points higher than I have set them at right now. It depends on how much impact specialist characters and "DM's best friend"-bonuses will have.