See my post at
http://www.alice.org/community/showt...light=Sketchup and also the post I just made,
http://www.alice.org/community/showthread.php?t=2417 .
Everything listed in those postings is free.
Blender is about as high-end a program as you can find - though I find it difficult to use. There is a freeware version of 3D Studio Max (I can't remember the name of the program - but there is a tutorial on it in the share objects section). There was also a free version of Maya 7 available - I haven't checked recently to see whether it's still available.
Actually, having reread your posting, I do agree that it would be nice if a future version of Alice supported .kmz format inputs. For most other formats, there are so many variations that it's difficult to define a "standard" - but Google does seem to keep tight control of their format - and Sketchup is certainly popular and easy to use.
Finally, if you are a student, you should see what modeling program is being used at your school and what it takes to have access to it. I can't speak for all schools - but at least the ones locally will give you access if you have a sincere interest and are taking related courses - even if you aren't taking the (computer

) modeling course.