why make a md2 instead of a mdl.
$modelname "C:\quake\ID1\progs\v_rockg2.mdl"
$skin "C:\quake\_models\test_rl.pcx"
$origin 0 0 0
$base base
$frame frame1
name this blah.qc and edit your dirs and model/tex name
put it were you want to export your model.
in milkshape go tools/compile quake1 model
find the qc...just make sure you have a pcx.
regards
Sean