Hiya
@Luke: Uh, Luke? He said Milkshape, and that they are using the Demo version of A6. Now, call me crazy, but I'd guess that if they don't have the $$$ for Milkshape and a version of A6, I doubt they have the $3500+ for MAX or the $2000 - $7000 for Maya.

Ok, now for animations, I don't use Milkshape, so this is a guess. Have you tried to save/export out of Milkshape as "vertex animation" and not 'bones'? MED seems to like it's own version of bones, and that's it. I have *never* successfully imported a boned model into MED. Ever. Not even without animation. But 'vertex' animated objects seem to be a LOT easier and more reliable.