Iv attached a video of the problem.
I booted the copter up on a flat surface, then transfered it to my prop saver string.
In case you think it is the fact that Its hanging, its not. Same thing happens on the ground....
Its most likely a stupid error, but hey, im an idiot...... :)
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D is right, normally you would decrease your Stabilize Pitch and Roll P term a bit to get rid of oscillations.. but wow.. Thats some oscillation..
Are you sure the APM is mounted properly. Its hard to tell from video but it looks like its mounted pointing at one of the arms, which would mean its a + frame. Perhaps you have X frame selected? That would cause that type of behavior as well.
Just FYI, the servo pins represent the rear of the apm, the gps plug is the front. The APM should be facing the front (either pointed down the front arm in + configuration or pointed between the front two arms in X configuration),
you have to decrease your P part in the Config for Stable I think