| Yeah it has its own mesh format that evolves with the engine. The official exporters export to the binary mesh format. Converters like unwrap3D usualy save in ogres XML format so you can compile your meshes to the latest version of the binary format.|
.Mesh format contains a lot more info than just geometry and changes a couple of times a year.
Materials are scripts that can be edited in your favourite text editor. I like Crimson editor as it has Syntax colouring whatever you call it for .Material, as well as .HLSL and .CG so you can do all your shader and material editing in one IDE.
Some exporters have pretty good fixed function material support and will create fixed function material scripts for you, and also let you edit shader parameters with realtime preview which is nice.