Well, first of all, I heard that blitz only support bones, not biped.
Biped is bones, it just comes with a lot of extra stuff as well. The problem is whether you rig it with Skin or Physique. If you use Skin, it should export perfectly with B3d pipeline. If you use Physique, it won't. Ultimate Unwrap has a nice exporter for 3dsMax though, and it supports both Skin and Physique. You can then convert to .b3d in Ultimate Unwrap and the mesh is perfect.
I'm not sure about your collision problem right now, it could be specific to Milkshape, so let's see if we can get the model exporting correctly from 3dsMax either using Pipeline or UU, and deal with the collision problem after that.