I found a way around the weighting problem!

Another user suggested that I try "Fragmotion" for my conversion needs.
So I downloaded the demo (not expecting much) and was instantly blown away but what I saw.

not only is it easier to navigate than Milkshape but it imports my models WITH THEIR ANIMATIONS INTACT!!! I only say this because whenever I have used milkshape it strips the skeleton from the model.

Also Fragmotion allows you to choose the type of animation your character will use; skeleton or vertex.

I suggest when exporting (through Fragmotion) that you choose skeleton source and vertex "finish"; It will convert your model into a vertex animated character, thus no weighting issues.