I use Blender to do most of my modelling. I would not have thought to use hair particles in a game though...

My grass is about 900 models, which are each 80 vertices, and use an overlay effect on the grass bitmap.



Having one huge model with that many vertices might cause your frame-rate to crash. I'm not sure exactly how that works, but I think the engine handles a lot of small models better than a small number of huge models...