You could probebly do it in milkshape, but it wouldn't be as easy as let's say Truespace5.2,3dsmax,maya,lightwave,etc. Now, I'm not to familiar with milkshape, but if it has meshsmooth that might do the trick.
Otherwise, since I'm familiar with Truespace, it's rather simple with it. There's 4 ways you can make your characters higher poly.
1.) Quadralate
2.) triangulate
3.) Smooth
4.) Meshsmooth <---- This is the one that really makes it nice.
So basically, search around for any software I mentioned above or basically any modeler with meshsmooth should get the job done for you.
A book? I hate book. Book is stupid.