You do know it is fairly easy to use the in game textures simply by linking to them in the model editing program you are using. Max and maya by making the m the difuse color of the material? (I have been doing this since my first weapon release)
And yes .png format only as you need an alpha channel. As it stand right now, there is strange flipping issues and that needs to be figured out to as why( Flipping the UVW or texture vertically ).
I have now managed to use the correct material ids, and this allows items to use metal color, hair color, clothing color ect.
I have also managed to get an item skinned to the sovereigns skeleton, so it will move with the mesh while in game. This makes making armor a ton easier.
As for animations we need their tools to export. It requires the right bones, and naming convention. I have yet to attempt a full skeleton but have been able to skin a mesh to a skeleton. Allowing myself to use the skinned atachmenttype.