I've used Milkshape before, and a tiny bit of Blender. In my experience, if you want simple Milkshape is as simple as it gets. It has what you to create (cubes, spheres, planes, etc), bones system, and texturing. Nothing fancy, nothing like the tons of modifiers in 3d studio max.

As for blender, more complex than Milkshape. I only used it a bit before I stopped. I found the user interface to be confusing for me.

You may also want to look in to XSI Mod Tool. It's another free modeling program (they also have a professional version but that's not free).

The free Truespace is hardly optimized and Blender 2.5 has an improved and customizable interface.

Honestly I would say that if you want something for free. Go with Blender. It's got tons of tutorials and it's rigging and modeling tools are easy to use. And all of the more in depth tools are also included.

It has sculpting tools, decent exporters and importers. Good rigging tools, good particle effects and hair which can be used for cinematics.

Overall I actually might switch to Blender sometime soon because it actually looks pretty nice. As of now I've mostly been a 3ds max modeler and also a Maya modeler. But it really seems like too much money to spend on considering how you have to pay to renew your liscence annually.

I think a good set up would be to start with Blender. When you get the hang of that you can use other free tools such as xnormal for normal map baking and the UDK for shader building and displaying and testing models.

Overall I just say that you should go with Blender, it's really improved over the years.

Anim8or i heard is a really bad program all over. Blender is very hard to use it is one of the most difficult user interfaces i have ever encountered, but maybe in time it will get there. I hear man amateurs have successful results with wingd3d and as mentioned truspace.