For my mod "More Classes Mod" I was going to make the vehicles more unique for each faction. For example, brownpants will have the btr-90 (http://www.military-today.com/apc/btr90.jpg). The only issue is, I don't have a clue what application I should be using to rework and change the models. Does anyone have any suggestions of applications or tips on how to achieve this?

Any type of 3d modeling software, probably a texture wrapper and gimp/photoshop, something for animations...

Vehicles are normal 3d models with their textures stored as seperate files. Not sure how you'd do any custom animations that you'd need or how you'd even implement the vehicle itself. Think vehicles are hard-coded into the game...

I use Blender myself for the 3D models. And an extension to export to *.mesh file format (which is a format read by OGRE).
Blender is free and powerful. You can basically use any 3D modelling software as long as it can extract to the *.mesh format.