Milkshape = Not free

. Shareware, $25. It is a good lowpoly modeller and it can do animations/bones with export to pretty well EVERY format imaginable. It can do SMD/PSK/MD5 etc etc, I use it mainly as a endpoint in my workflow to get my finished models into quake games. It can fully export and import SMD. Afaik it can only import MD5, which is strange, but since it does everything else no troubles ^^; mainly it can do SMD.
*Edit*: Milkshape is actually ok up to date. Aside from weightpainting, it has it's job complete. It has a large community and has stood the test of time. I definitly reccomend it for anyone trying to get from blender -> Halflife 2 SMD since it's so darned cheap. See
http://chumbalum.swissquake.ch/ms3d/index.html for the list of all 70 supported formats.