Poke me in IRC..much easier than explaining it all here.
In short: The docconv -outds=tinyxml works (At least it did last time I felt to urge to get rid of the stupid idle animations of some races)...The main problem is that you will get CS-xml versions of the models. And I have no clue at all if b2cs (or b2.5cs) even has an option to reimport the models to blender.
Edit: It's very unlikely you will find the sources of the models somewhere..you know, those are the eagerly protected ABC license artworks PS is sooooo proud of. No way you will get your hand on them without signing a NDA, ABC license and join the team, work your way up the hierarchy and promising to never make use of them for something else than improving PS..so probably not what you want. But even if you figure it out on your own be careful...the ABC license doesn't allow the reuse of the models so they are probably out of your reach for any PS inspired artwork.
But to be more constructive...the models can be found in art/meshes.zip. But each model will use more than one file there (CS allows including of other files from xmls...so the mesh and the animations can be in separate files for example)