Quoted from http://www.blender3d.org/

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Features

Blender is the first and only fully integrated 3D graphics creation suite allowing modeling, animation, rendering, post-production, realtime interactive 3D and game creation and playback with cross-platform compatibility - all in one tidy, easily and free downloadable package!

"Blender is quickly being transformed from an impressive 3D creativity tool to a full-blown games and new media design application."

Modeling

• A range of 3D object types including polygon meshes, NURBS surfaces, bezier and B-spline curves, metaballs, vector fonts (TrueType, PostScript, OpenType)
• "Smooth proxy" style catmull-clark subdivision surfaces
• Boolean mesh functions
• Editing functions such as extrude, bevel, cut, spin, screw, warp, subdivide, noise, smooth Soft selection editing tools for organic modeling
• Python scripting access for custom tools

Animation

• Armature (skeleton) deformation with forward/inverse kinematics, auto skinning and interactive 3D paint for vertex weighting
• Non-linear animation mixer with automated walkcycles along paths
• Constraint system
• Vertex key framing for morphing, with controlling sliders
• Character animation pose editor
• Animatable lattice deformation
• "Ipo" system integrates both motion curve and traditional key-frame editing
• Audio playback, mixing and editing support for sound synchronisation
• Python scripting access for custom and procedural animation effects

Realtime 3D/game creation

• Graphical editor for defining interactive behavior without programming
• Collision detection and dynamics simulation
• Python scripting API for sophisticated control and AI, fully defined advanced game logic
• Supports all OpenGL™ lighting modes, including transparencies, Animated and reflection-mapped textures
• Playback of games and interactive 3D content without compiling or preprocessing
• Audio, using the fmod toolkit
• Multi-layering of Scenes for overlay interfaces

Rendering

• Very fast inbuilt raytracer
• Integral support for the famous Yafray render engine
• Oversampling, motion blur, post-production effects, fields, non-square pixels
• Environment maps, halos, lens flares, fog
• Various surface shaders such as Lambert, Phong, Oren-nayar, Blinn, Toon
• Edge rendering for toon shading
• Procedural Textures
• Ambient Occlusion
• Radiosity solver
• Export scripts available for external renderers such as Renderman (RIB), Povray, Virtualight
• UV texture editor with various mesh unwrap modes

Interface

• Flexible user configurable window layout
• Powerful object-oriented data system
• Anti-aliased fonts with international translation support
• Windows for animation curves/keys, schematic scene diagram, non-linear video sequence editing, character animation action editor, non-linear animation mixer, image/UV editing, file/image selection and file management
• Inbuilt text editor for annotations and editing Python scripts
• Consistent interface across multiple platforms

Files

• Save all scene data in a single .blend file
• .blend format supports compression, digital signatures, encryption, forwards/backwards compatibility and can be used as a library to link to from other .blend files
• Read / Write TGA, JPG, PNG, Iris, SGI Movie, IFF, AVI and Quicktime GIF, TIFF, PSD, MOV (Windows and Mac OS X)
• Native import and export for DXF, Inventor and VRML files, with python scripts available for many other 3D formats
• Create stand-alone executables containing interactive 3D content or play back with the 3d web browser plugin