Irrlicht Engine

I'm making a first-person grid-based dungeon crawler like Wizardry, Bard's Tale, Dungeon Master, etc. I'm looking for advice on what would be the most practical program/format for levels.

They'll be mostly indoors and won't be all that complex. All I really need is basic level geometry (remember, grid-based) and some decorative static meshes.

I've dabbled in making levels for Quake, Unreal, and Source and also in Blender. I tried Irredit/Coppercube and didn't like it at all.

So far for my simple test program I'm using Blender scenes exported to Collada and then imported. I'm having problems with the textures loading and I'm not sure if Blender is really well suited for game levels.

Also, do Quake3 format levels support modern things like bump-mapping?

NetRadiant is great for architecture-like levels, like you describe

As for bump maps etc, no, the loader doesn't do anything beyond simple textures + builtin lightmaps if any. That doesn't mean you can't use bump maps, or any advanced feature of your choice - you just run a loop after loading it, find which meshbuffer has texture normalmappedgrass.png, and set the shader and additional textures accordingly.

tl;dr - the format doesn't have to support advanced feature foo, you can code it. No limits

QuArK + Radiant is the simplest way to design levels. the best is that you created your own level editor, and used your own logic there to create your optimal levels For Irrlicht, in fact, what you do with the levels is to display them, there is no initial optimization (you can after convert your levels to octrees) so, it is best that you add a bit of your own, given the potential simplicity of your game, shouldn't be hard

What about open worlds like in Morrowind?

Design your own format most suited for your particular requirements (streaming etc)