Mark,

unless something as changed, Blender is not very friendly with normals, there where many post here on just that.

Felix

Blender removes vertex normals so not so good for importing MoI objects. This has been discussed before and Blender.Org have no intention of rectifying this major error.

Here is a thread exploring the capacities of Cycles (in spanish): http://www.foro3d.com/f114/reto-aprender-cycles-98141.html

It is in spanish, but the screenshots are very self-explaining. This thread is alive, then there will be more advances.

P.S. And I talked about cycles a time ago
http://moi3d.com/forum/index.php?webtag=MOI&msg=4256.1

:-)