The railings are following the wall profile and they are not hosted by the stair, they are not hosted by anything. Here's an image of the railing using wireframe.
The key to this is in the properties of the sketched line segments of the railing. This image depicts how each has been altered.
Access to these properties can be found on the Options Bar when a segment is selected. You cannot alter multiple selections at one time, select only one.
The bottom segment's settings.
The middle segment's settings.
The top segment's settings.
The middle segment is permitted to slope using its Slope setting and the top segment defines how much to slope. It is necessary to be careful where each segment starts and ends to define the desired slope. The other subtle part of this is that there is a bottom "railing" acting as the base constraint for the balusters so they don't project all the way down to the level.
I've posted an example Project File HERE.
Here's a video I made on November 11, 2009 and added to this post too.