Softimage Xsi: XSI weighting and deforming for a game engine

Im building a game model for Half Life 2 and I am enveloping the finished model to animate. The question I have is that the default pose has its arms out to the sides (horizontal). After I weight the mesh and move the arms down to the side for a simple walk cycle, the shoulders are deformed in an unflattering way. What I would like to do is to be able to remodel the shoulder to something more appealing when the arm is at its side. I also would like to do the same thing when the knee bends.


Does anyone have any solutions to do this effectively for a game skeleton? Im not sure if shape animation is the way to go since I want to import it in to a game engine.


Thanks.