Fyi On "editing Models", from someone who knows about the engine Options

[hÿbrîdXΣr0]

I don't know where everyone's getting this idea you can try and edit the mdl files in Milkshape or something. At least, not how you're all trying to go about it..

Every file inside the XZP is identical to the basic structure of all of Half-Life 2's standard GCF files. There are only a few minor things that are different for the Xbox (I think the primary thing is textures are in the Xbox's native format instead of what Valve used for HL2.)
Other than that, mdl files are no different. If you want to edit or replace them, all you need to do is find a standard mdl decompiler that you'd use for HL2 for the PC. MDL files can be exported from XSI with Valve's plugin for it. It's nothing special. SMD files (decompiled MDL files) can be imported by a variety of programs like XSI and 3DSM (with a plugin).

Though it's for the PC version (you won't get support on the Xbox version here, trust me) there's always the Valve Developer Community on how to model and stuff. (Link to modeling resources from them)