I started out with Milkshape also…
I still use it , but only for file conversion. Milkshape is OK if you are willing to make something one poly at a time, or you want to take primatives and weld them together…
May I suggest a few applicatoins…
The first is Wings 3D,
http://www.wings3d.com/
it is a great place to get started modeling without paying anything! Yes indeed, It is FREE!!!
Plus it has the most advanced UV mapping system available, all you do is make a few slices and it will unroll the UV’s flat for you to paint your model easy,
The second program you already own, Zbrush2 … it is possible to make Lo-poly things with Zbrush, but most importantly, it allows you to paint your models in 3D, paint displacement maps, and paint normal maps … you can have a have a nice looking model in a few moments (as you can see from the cool model Ron made for you.). Zbrush is also nice for makeing trees :D
Well, while I am at it…
There is another freeware application, you will probably need/want to animate some things… and Blender is the cheepest solution. there is another solution called Anim8tor that is quite popular, and both are a bit easyer to use than Milkshape for animateing.(plus free)
If you want to spend a little bit of money, Look at XSI!!! they have an AWESOME deal going… if you are makeing games, Lightwave, and XSI is the choce of quite a few professional shops… there are other packages also, but they are quite expensive (3ds,MAYA[AWESOME if you can afford it],Etc…).
THere is another product spacificaly made for Noobies to get into games, I am not going to mention any names, but the advertisement is very missleading, and after you buy all the modules, manuals, and tutorials, you could have got XSI, and for a little bit more Lightwave.
plus if you already own Milkshape, you have the capabilitys to port into MORE games than the other guys advertise (it comes with a DOCKED version of milkshape)
-1:
anyways, if you have any questions about wings, or you want some tutorials, just send me a private message, and I will let you into a Private wings 3d tutorial website I am makeing.(free)
BTW I am not sure if you mentioned it, but What is the Polycount limmit for your game engine for the charictors? Unreal 2004 most the models I see are about 1200-8000 (user made on polycount webpage).
What polycount are you shooting for with the charictors?