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First off, thanks in advance for any info you guys can give me. I'm new to DBP but (probably thanks to a couple years of experience with SQL and various reporting software) I've been absorbing much of the code portion pretty easily. That said, I've got TONS to learn and I need a few more development tools =P

I think I've settled on using MilkShape and CharacterFX to create animated models. In this area I have two questions. First, is Milkshape (I have v1.6.4) royalty-free after purchasing it? I look long and hard at the legal-eze for these tools because I intend to create a commercial product with them, but if there was anything important in there during installation I missed it. Second, does anyone have suggestions for royalty-free shaders and texturing tools that work well with either MilkShape or CharacterFX?

I'm also gonna need to create my 3D world from scratch. I tried the FAQ suggestion of MatEdit but haven't had much luck with it so far, plus the lack of a windowed mode is frustrating while trouble-shooting. If at all possible, I want to get as close to a single 3d map as possible (meaning no "level-load" phase) for the whole game. Any thoughts on tools I could use to create that, or at least a good start?

Again, thanks in advance =)

MS3D is great
Also look into Lith-Unwrap for detail work on models.

you'll also need some sound effects and music...
6000 sound effects CD $9.00 at office depot (royalty free)
MTV Music generator CD $9.00 at discount stores

For textures its hard to beat Van Seem,
its free on the DBClasic showcase

Also, the models that come with DBC can be imported into
MS3D and edited and animated and are also royalty free.
DBC also has some ok textures too.

For infinit worlds,
that part is all up to how you do it. I'm using MagikWorld as a map editor for Archon. I'm not supporting all the features because I want an infinit map. So, I only support one matrix and then scroll it. Sure, you could create them at run time and build them off screen but that gets very tricky and hard to manage if speed is important. Archon is a FPS so speed is critical.

Wow, thanks for the info!

Now that I'm a little farther along I can see the value of Lithunwrap. I had actually already downloaded it while I was messing around with JTEdit and had no idea what to do with it =)

Kinda sad, but I hadn't even thought about sound yet, thanks for bringing it up I think I'm gonna be okay for sound effects and music with what I have at home. As an amateur musician (and my first job working at a recording studio) I have a Midiman sound card for digital i/o and some expensive and slightly buggy but royalty-free multi-track recording/mixing software (forget what it's called), guitars, and a keyboard. As luck would have it, I've always produced better ambient music than radio music.

Van Seam and Magikworld look nice, definately gonna be playing around with those now, thanks for the tips =)
My game is going to be a persistent MMORPG, so a static world seems to be a must. We'll see how it goes. And thanks again, I'm used to having to figure out stuff on my own. This community rocks.