Blender for those that don't know is a free and open source 3D modelling package. While not quite as powerful as some other major software packages such as Lightwave, 3D-Studio Max, and XSI it is still extremely competent and more importantly free.
Yorik has written up an urban design visualisation project using Blender, his write up is especially nice as it looks into not only the modelling but also the 'sauce' as he calls it - the living things in the scene such as people and cars.
The video below provides a sample of the output:
It is well worth taking a look at Yoriks Guide to Urban Design with Blender.
For more on Blender see http://www.blender.org/