Problem is Milkshape needed to convert Quake format to 3ds, but Milkshape 3D as some others (Lightwave) do not support 3ds's KDSdata. You need intermediate program like Anim8or, 3dExploration, or QuakeModelEditor(QME) that reads non-kds 3ds but writes 3ds with kds data. Anim8or is freeware but sounds like it has texture exportation problem. 3dExploration is like expensive but demo is fully functional for 30 days. QME is freeware but the guy who wrote it no longer maintains a web site, so good luck finding it. If you need a copy I will e-mail it to you or upload it. It's < 200kb. One other alternative might be blender w/the proper plugins.
P.S. On exporting textures, I have heard you need to do a planar mapping, but cylindrical mapping also works (KEGs told me himself). Spherical mapping might work.