I'm looking to avoid working with static meshes. It's for a class and the professor wants us to focus on using brushes as he's just wanting to illustrate the basics right now. He's never seemed to work with any engines that brings its bsp data in from a modeling program similar to what Halo does. He understands that it's possible and knows how it'd have to be accomplished, but has never seen it done. I'm hoping that if I can find a .max->.ut2 (or whatever the map file names are) converter I can fall into the "above and beyond" category and get an A.

Pretty much, every single person who has ever done 3D modeling before hates the brush tools provided and is seeking salvation in the form of a converter.

As for using a skybox and placing all my stuff inside as a static mesh, from what I've seen, it doesn't work like that. It might be something like that if you're working with terrain, but we haven't gotten to that point in learning/working with the editor yet.