Well, my old method was using milkshape (3D modeling program) and then using an exporter to export it as an mdl file which I edited so it reacted as it should ingame (also after converting it to an mdx file with Guesst converter (you can find it as a tool)). I used the model editor which you can also find on the site to apply the materials.
However since my program have been updated the exporter I have fails to work (since its old) and also using milkshape was never the optimal way I wanted to work with it.
Others use an old version of max in conjunction with art tools (a good exporter, but limited only to an older version of the program (same idea applies to 3DStudiomax (another 3d modeling program))). You can find an exporter for that program on the site and it would be my recommendation to use that way around.
I personally have been searching and looking for someone willing to create an exporter for maya (newest version) so I can begin to make models in the optimal fashion, but that have yet to happen.
All of the above however only applies if your considering scratch modeling, you can instead make models by manipulating existing models. And don't worry those models can be vastly different from their original appearance - I believe that General Frank is an example as to how well it can be done. I must admit I am not sure what tools they use now a day but in the old days it was oinkwinklers tools combined with the before mentioned model editor and converter.
But honestly the easiest way for you to start (still if you want to do it from scratch), would be to look up
Blinkboy's great tutorial on animation. Its made for the max program and there is links to just about all you need. And then go check out all the other tutorials here on the site in regards to the 3D modeling:
http://www.hiveworkshop.com/forums/3d-modeling-tutorials-282/
They basically write it in a proper form thats easier to understand then my quick sum-up. (And likely they will use the full correct name for things
)
Enjoy and welcome to the site
Forgot to mention: alternatively you can also make do with a picture editing software, like Photoshop or gimp to make skins for models. Basically the model remains the same, but appear different due to changes in the texture its using. It saves you the step of having to create a 3D model to animate and texture first, and it saves the map makes some space by only importing a skin - though it does also overwrite existing skins so there is problems with it as well.
