I've had another thought. I was perplexed when I started using XSI, because with just the free version I cannot export anything but the .xsi format. With the Half Life 2 Plug-in I'm able to export both SMD Skeletal animations and SMD Mesh, but also I'm able to export .VMF textures also(plus weight a weight map).
Anyways I got off subject, I thought I remembered Blender being able to import the .XSI format, but it doesn't. Yet it does Export to .XSI. You could of course model everything in Blender(if thats what your comfy with) import it into XSI and convert it to SMD that way.
You might try giving XSI a chance though, I've used almost all the major 3D Apps out there; 3ds max, Blender, Wings, Milkshape, even tried the free version of Maya. I've never gotten any models completed because I couldn't find an App I was comfortable with, but XSI just feels right to me. While I'm just getting into highly detailed modeling, I have done alot of animating; spaceships, airplanes, creatures and all that. With XSI I've finally found an Animation/3d App that I might actually invest 2K in(with my nice fat $20,000 re-enlistment bonus from the Army, of course)Though the free tool is great, I'm looking for more rigid/soft body animations, physics, cloth, and the awesome Ultimapper that Softimage has, which generates normal-maps and effects maps for you.