Blender is by far the most powerful complete application you can get until you start looking at Maya, Modo , Lightwave etc.
The main reason people do not use blender seems to be 1) the user interface and 2) it is not an industry standard.

Truespace has always had a reputation for bugs, and its future is now in question.

Milkshape and wings are very good stable modelers but are limited packages, your animation options may be limited.
Milkshape seems to be the most popular replacement for MED.

If you want to use truespace and you cannot export to Mdl you can use ultimate unwrap... it does a good job converting files even if you do not use it for skinning.

If you need to create cut scenes and cover art blender is your best choice.