Blender is a free, open-source 3D modeling and animation application. It can also be used to create games.

* Blender.org - official website
* Download page
* Wikipedia article
* Blender Manual

The blender interface is unintuitive and difficult to use. There are a number of tutorials available:

* YouTube - Blender 3D Tutorial - The Basics - video gives a good overview.
* YouTube search

The software makes extensive use of hotkeys.
* Blender Hotkey Reference

Unless someone has a better idea the software development side needs to use the Microsoft XNA toolkit as the game engine. If the art team is going with Blender here is some stuff about developing Blender files for XNA.

http://www.stromcode....

Some Blender links for character animation:

http://www.stromcode....
http://wiki.blender.o...