Here are a few links to free modelling software and download sources for free models.Free 3D-Software
Blender is a full functional integrated 3D creation software suite. It lets users create high quality 3D graphics, movies and replay real-time, interactive 3D content.www.blender3d.org
Check out this site for *.ASE (Ascii Scene Export) export-plugins as well.http://www.quake3bits.com/htm/tools_utilities.htm#ase
Softimage offers a free version of the popular tool Softimage:XSI on their website. All you need to do is sign up, download the tool and the UnrealEngine-Plugin and start modelling. The free version has everything you need included. There are also documentations available.
The commercial version of XSI was used for HL2 and SWBF2 among others. XSI is a very popular package in the game industry. You should definitely check it out.www.softimage.com
GMax is a limited version of 3D Studio Max, which is obviously the standard game-art package and one of the most popular 3D Software available. You can basically apply any modeling tutorial about 3DSMax to GMax. And there are thousands of 3DSMax tuts out there. As 3DSMax probably the most used 3D package in the industry, you should at least work with GMax, if you want to work in the industry...
GMax's development has been stopped and you can only get the latest version on TurboSquid. You have to sign up, which is free afaik.http://www.turbosquid.com/gmax
Wings 3D is best suited for modeling and texturing low-polygon meshes, towards which its interface is geared. Compared to other open-source modeling programs like Blender, it is minimalistic. This allows a very flexible way of working, but it also means that Wings 3D is more limited than other modeling programs in certain areas. For instance, Wings 3D cannot handle animations. YOu can get used to it very fast and it provides an excellent UV-Mapper.www.wings3d.com Free ModelsNote that you will probably have to mention the original artist! Don't be an ass and claim copied models as your own Also make sure the models you download are LOW-POLYGON models, so they don't eat up too much GPU-power!
SciFi3D offers StarWars- and StarTrek-Related models and many Science Fiction Models more. http://scifi3d.theforce.net/
TurboSquid has commercial models as well as free models.http://www.mayang.com/textures/Please give credit to the texture/model-creators when you release your map!
See also:Sticky about Texturing Software and free texture sources