What other tools or software do I need?
I would suggest checking out Blender
www.blender.org . It has a bit of a learning curve (at least for me it does), but it is very powerful. What I will be using it for is making my models, and painting textures onto them. Also, with the recent release of v 2.49, painting onto textures now uses GLSL, so it is now perfect for painting textures onto models. I am actually really psyched about this.
Also, I think people use Gimp for creating textures as well.