Sketchup isn't really a modeling program. It's like a 3d architectural drawing program, and it creates crappy models for Blockland.
wtf it sux
Now export it to OBJ and then DTS and watch it get forgeted up.
I love you.EDIT: Milkshape also costs money, it was originally for HL1, and it creates low-poly, crappy models, unless you are an amazing modeler.
yes, it works with sketchup 8, you just messed up. :D