From TDN

The following applications will help you model objects for use in Torque. Please make sure you check the DTS Feature Chart to determine the best modeling program that will suit your needs. Also, be sure to check the Artists section for tutorials and articles pertaining to each program.

3D Studio Max - Autodesk® 3ds Max® 8 software provides new asset management, character development, UV mapping, and scripting tools designed to maximize your productivity.

Blender - Steep learning curve, but it is much more robust than many other commercial modeling programs. Has an additional benefit of being free and open-source software.

Cinema 4D - Maxon's CINEMA 4D provides ease of use and legendary stability for modelling and animation (although no exporter exists for either DTS or DIF). Also from Maxon is Body Paint which offers hassle-free texturing that lets you quickly paint highly detailed textures directly on your 3D objects. Every configuration of CINEMA 4D Release 10 now includes the BodyPaint 3D module. Create your models with Cinema 4D, save them as .3DS and use Blender 3D to create the DTS.

Lightwave - LightWave 3D® has a long history and brand name in the computer graphics industry. It has a great polygonal modeler, also excellent UV tools, which is very important for real-time graphics.

Maya - AutoDesk Maya software is the world's most powerfully integrated 3D modeling, animation, effects and rendering solution.

Milkshape 3D - MilkShape 3D is a low-polygon modeler, which was initially designed for Half-Life. During the development, many file formats have been added. The DTS Plus Exporter should be added as the default DTS Exporter lacks the same amount of functionality.

LightRay3D - LightRay3D is a GMax-style low-poly modelling tool, DTS exporter included. New version exporter check here. Sample model for TGE download here

SOFTIMAGE|XSI - Steep learning curve, very full featured, and widely used in the game industry. Focused on character development. Powerful animation system, game development centric asset management integration (Alienbrain), facial expressions system (via SOFTIMAGE|FACE ROBOT). Excellent subdivision surface modelling tools.

Houdini - Houdini by SideFX, has a built in DTS exporter and has a very efficient workflow, takes some getting used to but for the price of $99 (as of writing this) for the Indie version it is a powerful fullversion tool for 3D modelling for Torque. Mainly intended as, and used for visual effects in films and similar, it has very capable tools for modelling.