Would it be alright if I made a computer game that had cutscenes with non-commercial models as long as I let people download and play the game for free, or is that illegal?

You will need to check the read-mes for the models, and/or ask the creators for permission. Some people wouldn't mind; some would.

I suspect the key would be whether or not you are redistributing the model. Even some commercial models restrict redistribution.

I wouldn't make the model available for download but it would be in an avi file as a cutscene, would that be the same as redistributing the model?

avi's are the same as still images- do what you want- it's not a model or mesh of any kind

I take the free stuff non-commercial as not making money by using the model...if it's in an image that you sell its a no-no that is my interpritation. But as you are making no money on it I would say that it is ok, buti would check if you have any doubt's with the autor.

Whoops, I didn't read closely enough. I second Geoegress; it's just like any other image you do.

Because of copyright, it's always a good practice to ask the creator of the object first. Send them an e-mail, then when they reply, save that e-mail in your file, so show that they have give permission. I've done that and in all cases, they've always said yes. I just keep the reply e-mail as a safety measure, in case the artist forgot they gave me permission and I have their reply as proof. Melanie