The good news about Blender:
The bad news about Blender:
Web site: blender.org
BlenderWiki The Blender wiki has links to tutorials, the user's manual, a quick start guide and other documentation.
The Blender documentation download/links page
The Blender manual
Blender 3D: Noob to Pro (a Wikibook)
Milkshape 3D is not free, but it is inexpensive (about $35). It runs only on Windows. Irrlicht can load and animate MS3D files (but not on a PPC Mac).
Milkshape can export to MD2 and .x files (among other formats). There is a plug-in for Ogre3D export also.
Web site: http://chumbalum.swissquake.ch/
The web site includes an SDK for writing plug-ins, and sample code for loading MS3D files.
Web site: http://www.artofillusion.org
This is a free 3d modeling program written in Java.