Ok as I read more about this, I think I am beginning to understand my problem.
Correct me if I am mistaken at any point please:
Setting material properties in 3d studio is useless, the only time i'll see those rendered is in 3d studio itself. When I export the object to .X none of those materials are saved, just the colors of the surfaces.
In order to display an object using multiple materials (via the DBP commands), I would have to:
1) Save/Export each portion of the model that uses a different material seperately.
2) Load each "piece" of the model as seperate objects in DBP, applying the different material settings to each along the way.
3) Align the objects through code to re-assemble the "pieces" into the original model.
At this point, if I could "weld" the model together into a single object for the purpose of movement/rotation/etc, then this would be fine, otherwise manipulating this frankenstein object would be a total nightmare.