3D Studio Max is the best option...... it's the only 3D application which seems to be capable of doing animated characters for FPSC. I know it's not cheap at all.
Some recommend Ani8or, others Fragmotion, blender, 3D Canvas or Milkshape, all of them cheap or even free..... but I have yet to see someone create a animated character for FPSC with it. I know a good number of people claim they can do it, but I've not seen their work at all.
The people we do see releasing animated characters, seem to use 3D Studio Max.
I'm trying Cinema4D at the moment, haven't been succesful yet, but I'm not giving up for now.