You'll want to fix the shading on your model before you start texturing. Without proper edge support, dropping everything on 1 smoothing group results in what you have. This will look very bad in game, especially when you have a specular map applied. Anything 90 degrees or greater should automatically be a seperate smoothing group.
Its obvious you're using max, so in edit poly mode, under polygons, you can use the auto-smooth feature which should be defaulted @ 45 degrees. You can assign smoothing groups manually, poly by poly or if you have a newer version of Max, then in the ribbon theres a smooth section, smooth 30 usually provides good results. You can also drop a smooth modifier on (Not Turbo or Mesh Smooth, These subdivide).
I dont think KF has a name for their texturing? Aside from realism. Theres alot of different "methods" to texturing and it all depends on what you want. You can texture from scratch, you can texture from Photosource. Do you plan on using a specular map? If so then youll want to keep the lighting toned down in the diffuse and bring it out in the specular. If you dont plan on using a specular map, then paint as much light into as you can.
Study the KF materials, very impressive texture work from TW, and the Scar is my favorite.
Edit : Also from time to time, throwing on a material with some specular can help spot and treat smoothing errors easier. Default mat works fine but I use xoliulshader 90 percent of the time as it seems to be the most accurate and closest representation of gaming shaders/lighting.
http://www.laurenscorijn.com/viewportshader
