Personally, I swear by Blender. It is an amazing piece of software and has taken care of all of my 3D needs. People often criticize Blender's interface, but personally, I think it's brilliantly structured. It just takes some people longer than others to get into it.
Blender's interface, although it takes some memorization, is streamlined for efficient production. It's good for all kinds of applications too: low poly, high poly, rendering, animations, physics simulations, game making (yup, it has a game engine built in), etc, etc.
Milkshape on the other hand, is strictly a low poly modeller/animator. It supports your basics: Mesh manipulation, and rigging. I've never used it, but every model I've seen come out of it (it
does have a rather impressive list of file formats it can export to) seems to suggest that there is no support to facilitate good topology practices (which I suppose is expected when you deal in very low poly models).
@Quik: Are you still using Milkshape? The pics in your thread kinda look like they're from something else.
Edit: Just downloaded your base mesh and it has .max files in it. Good for you!

Quite a step up from Milkshape!