If your going to make the terrain a model, you could also in theory make better detail textures. You can use BC42/ED42 to make a second set of textures that use detail textures instead.

Then merge them with the lightmap textures (making sure not to reduce the resolution) and voila! BF2 style terrain detail! PM me if you need me to help you on doing this. I think since you will be doing away with dynamic shadows anyway, making the terrain a mesh would allow you to add detail to the textures via the lightmaps like I described above for something that could make the terrain look a ton better!
Since the lightmaps will be high res, I would recommend making them DDS files!
As for making the body show up in 1p mode...I have tried this in my bfheroes42 mod with not so good results. I was able to move the 1p camera back and telling teh game to make all the body parts visible by reming out the commands that told it what view they would be visible in and then adding the outsideHUD command to the soldier camera so I could switch to my new 3p view. The body was visible, but kit parts were not and only the top half animated. (since the game thinks the view is 1p it doesn't animate the lower torso and doesn't display the kitparts).
I think Archi might know more on this as he knows more on animating soldiers and stuff and might know how to add 3p mode. But it would involve altering the soldier animations. Something I'm not really good at right now.