Hi Kirk, I'd recommend using FBX format for the best results into Max, but you also need to make sure that you update your Max FBX import plugin to the latest version, versions older than 2009 had various bugs in the FBX importer.

The Max FBX import plugin page is here:
http://usa.autodesk.com/adsk/servlet/pc/item?siteID=123112&id=10775855


But you will need to go to the archive section for the previous release to get one for the older Max 2008 version, that is here:
http://usa.autodesk.com/adsk/servlet/pc/item?siteID=123112&id=13706733


Please let me know if you are still getting artifacts after updating the Max import plugin.

- Michael