.ms3d is the file extension for Milkshape 3D. Meaning the program is Milkshape 3D
Didn't see that.
ON TOPIC: Does your model have backfaces? These would be faces that are either black or invisible.
For flatshading, make a material for everything you want flatshaded, unweld all verticles THEN you tile texture mapping, then go to material you created earlier and uncheck autosmooth then go back and reweld all.
Use Torque DTS plus to export, not Torque Game Engine DTS