Yes, that was definitely the problem. Simply changing the file format manually almost never works for anything, because nearly all file formats are encoded differently. Just make sure you're using Blender 2.49, or the dts exporter won't work.
Pretty sure I'm using Blender 2.65
The person that made the model sent me it as a DTS (He originally sent it as a blend file) and now when I spawn it, the game crashes.
I successfully made and released a vehicle with the collision mesh on the same layer as the detail mesh.