Note: if you're going to export to .mdl straight away, you need to convert your texture to quake palette manually, you could probably use FIMG or something for it, but I just created a new palette for Quake in GIMP.
Due to popular demand on #qc, I am posting a quick how-to tutorial to get your models from MS3D to Quake .mdl. (If there are tutorials for this here already, sorry.)
First of all, leileilol, steer away from this topic. Also thanks to Biodude for helping me with this in the first place.
Tools we are going to use:
Gimp (any image editing software will probably do)
Notepad (or any other text editor)
Noesis (amazing piece of software)
Make your model, animate it, texture it, you know how to do this. Just keep the texture in one file. (Not sure if it has to be power of 2, but I always use it to be sure.)
Prepare for .md2 export from MS3D, create a md2.qc file in the directory where you want to export your model. Get the texture to the same directory as a .pcx file.
Here is an example what your md2.qc might look like
// Sample MD2 config, copy into export directory
$modelname models/model.md2 //this doesn't actually matter, you set the output model name in MS3D
$origin 0.0 0.0 0.0
$skinwidth 256 //Be sure that the width and height here match the size of your texture
$skin yourtexture.pcx //Be sure the texture is in the same directory with this .qc file
$sequence run 1 5 //the numbers represent the start and the end frame
$sequence blargh 6 12 //you can add these sequences if you really want, but all the frames are going to be in the model anyway
Now be sure that you have all your vertices assigned to a joint in MS3D, if you have a model with no animations, just create a joint somewhere and assign everything to it.
Milkshape won't export .md2 if there are unassigned vertices.
Your model should be ready export now, select Quake 2 MD2 from the export menu.
Open up Noesis, open your beautiful MD2 model and select File -> Export, choose ".mdl - Quake MDL" from the Main output type dropdown menu. Everything should work with everything else set as the default, change the output file name or directory if you wish.
AFAIK Noesis converts the texture to default Quake palette, which is ok for most of the cases.
Also there is an advanced option to avoid fullbrights, just add "-mdlavoidfb" to Advanced Options field.