I've been having some problems with all the models I compile. When I shine a light on them, they have very sharp transitions between light and dark as seen here: I'm wondering if there is a command I'm missing when compiling or I need to add something in the vmts of the files that could make this transition look smoother? If anyone knows, it would be a great help.

I'm not sure if you reduced the quality of the original picture to upload it, the model is running a low rez texture, or you have that setting turned on in sfm. For a while, I haven't been using sfm, but a while ago. I went back on and noticed all my projects were pixelated!!!!!! So I was hella pissed and I recall you having to right click and some setting. I'll try to check it again. But it's basically some strange kind of lighting and if used right you can make the graphics like the walking dead where every model is outlined to the camera's perspective with black. It'd be better if you uploaded the model to see whether there's something wrong with your sfm or your models. Also, if your models aren't created from scratch they may have some funny settings. Like the vertices aren't connected, etc. But half and half is quite rare. I'm not sure if you're saying it's always like that or if you rotate the model, the half dark/brighter lighting is elsewhere. If it's in the same spot, then that's different.

Maybe you got it figured out in the meanwhile, but to me it seems more like the normal map got messed up. If it were an UV map problem you would see the texture being stretched and inconsistent.

This is propably cause of the UV map. You maybe have there marked the seams and source is making a very high visible edge. You cant reall fix this. The only thing is that you raise the polycount in this area or you remove the seams and set them to an other place(wont recomend the last because you have to make the entire texture new =/).

Sorry I should've updated this post. I think it was probably an issue created by importing the model from an XNA filetype into 3DSmax. By welding the vertices on these seams I've been able to get rid of these problems completely. I'm not that experienced working with 3DSmax yet, so I didn't know how to do this before.