Disclaimer: this is just a hobby of mine.
I use Blender a lot. I don't know how to use most of the features it offers, but I do use it for:
- Creating 3D models
- Texturing
- Rigging
- Animation
It's also integrated pretty well with Ogre3D with the blender2ogre plugin. You can use this to export your mesh's to Ogre (another tool on Ryan's list) and preview the mesh's in OgreMeshy to make sure the mesh, its texture, and animations looks okay before you put it in your application.
You can also preview your scene in Tundra (which also uses Ogre). You can preview your mesh just like in OgreMeshy, but you can also simulate physics. This should be pretty good for testing scenes in a video game.
I've had some problems with the exporter and had to edit a couple lines in the script to get everything working correctly. Other than that, I think using Blender to create Ogre3D applications is a pretty good solution.



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