Although max is the best way to go, it costs 9000$ so not everyone can afford it. I personally saw many beautiful and commercially viable stuff came out from blender likewise many ugly stuff from Max. It depends on artist using the tool. Although Max has better raytracer and other stuff, it's still possible to make really great gfx in blender for incomparable cost.
This is so true. "The brush dose not make the artist" - Francisco de Goya.
Though like Meta said.. Blender can make some awesome stuff... I have also seen some great stuff come out of cinema 4d witch is a cheaper solution -
http://www.maxon.net/pages/products/cinema4d/cinema4d_e.html, it also supports the Maxwell Render -
http://www.maxwellrender.com/ (current top of the line render.. Blizzard just switched from vray / Brazil to this btw)
Also you may want to check out Mondo 3D -
http://www.luxology.com/ it is a all in one solution and it is also relatively cheep. it can animate, render and is one of the BEST modellers, if not the current best in the entire world at the mo. (I prefer Silo myself as it is simpler but If you are looking for advanced modelling then Modo is the go)
As I use max and the panda export plugin you will have to ask others how to get this into the .X format for WME
But the blender/fragmotion options is a totally free solution for wme 3D content creation