The Engine dont support jpg, png, psd only pcx, bmp ... dds (?) what a kind of stuff it is???
Well this is not true for everything but psd:
Supported image formats are PCX, BMP, TGA, DDS, PNG, JPG, and WAD.
See this page:
http://www.conitec.net/beta/fileformats.htmYou don't need to use the MED of 3DGamestudio, but can create your models in any other program, as long as the file type is either directly supported by the engine or by MED, which you can use as a blunt import tool to get your models into the mdl file format.
by the way: the sybex version is not the way to go, as it offers more restricted upgrade/update possibilities.