You aren't doing anything wrong. The in-game importer doesn't support weapons. Compile it manually.

http://i.imgur.com/MaP4f8k.jpg

For instance, select only your model (in this case the cube) and export it. Do not click "scene as configured". Also make sure that your model is not part of the scout model. If you accidentally merged your model and the scout's model, you will need to separate them (go into edit mode, select your hat, press "p" to separate into a new object).

Make sure you are only exporting the hat itself and not the entire scene. Chances are you are exporting the entire scene (which includes the scout model) to a .smd.

Looks good! The texture might be a little too dark in comparison to the medic, but that's a minor tweak.

Well your friend did a great job, and you did a great job with the hat itself!

Well the itemtest map has been extremely buggy... Have you tried opening your model in hlmv? If it works, it should be fine. Look for the HLMV.bat file in your C:\Program Files (x86)\Steam\steamapps\common\Team Fortress 2\bin\ folder. If it doesn't work, you might need to edit the .bat's 5th line to
If you still want to test it out in-game, I recommend compiling your hat using an existing .mdl name. This will replace the default in-game item and you can test it that way.

I rated it up! Looks fantastic. Good work with the promo art... Be sure to use the service provider feature :)

Decimate completely removes any UV data. If you want to go reduce your tri count, delete edgeloops, remove faces that can't be seen, remove details, etc. Most of the stuff you'll do will need to be done manually.

Try using crowbar to decompile the engineer model: http://steamcommunity.com/groups/CrowbarTool

Oh I see... The blender wiki has an article on how to emulate a 3-button mouse: http://wiki.blender.org/index.php/Doc:2.6/Manual/Preferences/Input

The best thing to do is to get a mouse with a middle mouse button.