skinned mesh models

Hi Everyone, Does anybody have any experience/recommendations with skinned mesh models? I am currently using the md3 format in directx (because the models are easily available) but I have found it rather inefficient. It seems as though keyframe animation for characters is a thing of the past. I would rather use a boned model format but not sure which one to use. I like the flexibility of the Half Life model format but I am not sure if it can be skinned on the GPU. Any suggestions? thanks!