I always give this list, these aren't the best apps in the world, but I think they're brilliant for beginners, and are cheap/free. They work best all together.
Wings 3D - Modelling - Free
Milkshape - Animation - $20
Lithunwrap - UVMapping - Free
GIMP/Pain.NET - Texturing - Free
If you want cool rendering I would recommend Blender, but most people find it difficult.
Once you are happy with modelling with your apps, you can move on to stuff like Truespace, but when you're going to pay that sort of price I'd say Softimage | XSI would be worth the money, its a cheap professional modeller, harder than some tools, but not harder than houdini or Blender, I'm learning it myself, it seems to be worthwhile, but thats when/if you want to progress and spends sums of money on 3D modelling.