Quote: "I havent read what anyone else has said"

uh...thanks?
Quote: "It's no secret that the stock models for FPSC aren't the most advanced, but if I use my own models and textures, will it look more like a next-gen game?"
Your models can look pretty awesome in FPSC if you use one of Bond1's shaders. (check out DarkSHADER if you want to really get funky with it)
I think if you search for Bond1's shader threads and look at the images of what he can do in FPSC then you will be pretty amazed. (check out his tutorials too)
Check out the Metro Theatre pack he created for some shader eye candy for FPSC that will make your models really stand out.
Quote: "Should I just use UDK instead?"
I found it much more difficult to get custom animated models into UDK vs getting them into FPSC. (but I use a $35 modeling program, not the $3500 one they expect you to use)
Don't forget about the new LIPSYNC feature in FPSC, because if you like to model characters then you might enjoy playing around with that.
And for those who didn't know already; model packs 44 & 45 characters ARE rigged for lipsync. (I didn't know it until after I bought them)