I'm dumping my post in favor of just letting everyone know... that Googling for "Blender to NDS" has given me 3 different methods for generating a proper binary export with correct normals that react wonderfully to lighting.
Exporting from Blender 2.49 to .3ds or .x format and then converting to bin with the NDS Model Exporter does not appear to be creating normals correctly. I do not know if the issue is with the Blender export script or the Model Exporter.
Proper Model Conversion from Blender
Re: Best approach moving forward...
See above.
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