No, I'm not. Conversion is Conversion. There is no "crappy" conversion. Source can't use HTL, and uses Phong instead of shinemaps. I just need to figure out how to add the normals and glowmaps.
Uhhh
What.
Source very, very definitely does use HTL (HTL = Hardware Transform and Lighting), because HTL is a very very fundamental optimization technique in 3D graphics that has been around since the bloody GeForce 1. The polygon counts used in FS2 models should pose no realistic problems to an engine that can render d0G.
As for phong shading vs shinemaps, you are, how do I say this, entirely wrong.
The first version of Source (the one that shipped with HL2) used Gouraud shading (otherwise known as per-vertex lighting); the GPUs of the day weren't able to handle per-fragment lighting in any performant way.
The version of Source used in recent games, like TF2, Portal 2, or Left 4 Dead, or the HL2 episodes can very definitely do per-fragment lighting (AKA Phong shading). It's all just a question of shader support.
Shine maps, in FSO, are used to modulate the specular highlight colour generated by the lighting algorithm. What you are missing though are glow maps, which provide a very basic degree of eyecandy.