I personally used this video to learn how to extract things from TS3 http://www.youtube.com/watch?v=EUE-rbaTBVo (the UVMapper part is not needed) and then basic TS2 object creating, you can find a lot of tutorials on MTS2. I know it's pretty vague, but really, all you need in s3pe to extract the MLOD, open it in Milkshape (you need a plugin for that - again, object creating tutorials will tell you which one) and then create a TS2 object as always. Oh and you'd also need TSRW to extract textures, I'm not sure if there is any other way to get them (s3pe usually has only grey, useless textures).