I'm going to give all this a try---as I'm very interested in using the UDK to test urban design (and then run games occuring in these designed / augmented spaces).
Signed up on the Unreal community discussion board...and found this same topic discussed here:
http://www.katsbits.com/htm/tutorials/sketchup_converting_import_kmz_blender.htm
Ideally, I'd like to work out a good pipeline for using SU created content....at least to put down an initial layer of general buildings, streets, etc.
Having said that...I'm not married to using SU to create content. But, like Revit and Microstation, I know SU well and am just hoping ot reduce the amount of new programs that I would need to learn (or direct others in using them).