Looks very good so far, but you should definitely go for a normal map, a specular map, and a highpoly model and baking of its normals to the texture as well, to get near to the state of the art.

http://www.puppenheim.org/
http://www.wuerfels-welt.de
Old Game Tutorial: http://www.puppenheim.org/MITutorial.zip
Free Game Editor: http://puppenheim.org/AlienalsWeihnachtsmann.zip
http://www.puppenheim.org/blender_starting_main_settings.txt