I wrote a short tutorial length pm to Zami90 explaining how to decompile and recompile a modified version of the model. I figured everyone should know it and this is what I wrote.
After you install and unpack the tools, here's is how you start. For example, we will use the common crowbar replacement. Lets say we're giving the player a sword instead. (The item could be anything you modeled, so be creative.)
So you take the v_crowbar.mdl from pak0 or the steam gcf file. Put this compiled model into the folder with the modeldec tool in the decompiler's folder. Its best to make a folder and call it 'crowbar' or something similar because when you drag and drop the v_crowbar.mdl file onto the modeldec file, it will break it apart and give you a load of files. Move them all to the folder you created. If you don't and decompile another model, the files can and will save over one another. So stay a little organized.
You should have a seperate folder for YOUR custom models so don't save over the originals in the decompiler folder. In your folder, move ALL of the decompiled files to your new folder. Now we will make some changes.
Now that you have a load of model SMD's and such, open max and choose import from the file menu. You can bring in any SMD you see, but most of them are animation files. What you need is the REFERENCE model, which is crowbar_reference.smd file.
Importing it will place it in max with the bones and textures (if you select them to be imported, they might be out of order) If you have any modelling experience, it should be easy to delete just the crowbar from the hands an import your new sword model and line it up with the hand. Once you've done that, it will require some beginner level rigging skills to bind the sword to the same bone the hand is bound to.
Now we export it to the smd format. A dialog will appear asking what kind of smd it is, either animation or reference. This is the reference so save it as one.
Save over the reference smd in your custom model folder and your done with max for now. Also, move any texture files used to that folder as well, like the textures for the sword for example.
Within your model's folder, there is a QC file. If you haven't change the names or added any animations, we don't need to change this. So let open up the compiler GUI and load the QC from your model's folder into it. Hit compile and a new v_crowbar.mdl will appear in that folder. If there is any error, it will be explained.
The most common error is "Can't find NULL.bmp" This happens when a model has a face or a polygone that has no texture applied to it. If you can find it in max, it is safe to make a small 16x16 all black texture named null and place in your model's folder.
Another one is when it compiles fine, but the faces are inverted. This happens frequently when you clone and flip objects. Its always a good idea to test you models by compiling them before you finish them.
CHROME was tricky to figure out, if you want chrome on a model but it looks flat and not shiny, that's because you need a smoothing group applied to those faces. Smooth is a modifier in max that will give you the options to do that easily.
Also, making a model with a crazy amount of textures, bones, and polygons will give you a max size error. I don't know the limits, but they are there. I've only enountered this error once, so its not much to worry about.
I hope this helps. I can answer idividual questions if you have any.
If you have a model, showcase it here!