At Nordic Game Jam 2007 I was asked if I had any knowledge about open source tools or cheap tools that could export to fbs and X formats which is the formats that the content pipeline support so far. Cost is of course an issue when you are a student.

From our Partners site there is a free version of Softimage|XSI that you can export .X files with http://msdn2.microsoft.com/en-us/xna/bb219594.aspx and http://www.softimage.com/community/xsi_mod_tool/default.aspx

Wings3D is a Open Source Project http://www.wings3d.com and will export an FBX file.

Blender is also open source and will export .X files http://www.blender.org

Milkshape is a popular program among mod creators and is only $25 (Shareware) http://chumbalum.swissquake.ch/ms3d/index.html which lets you export FBX.

Hope those help!

My slides and demo will be avaliable shortly.

Thanks to Michael Klucher for his input.