I have a poly mesh with a turbosmooth modifier in the stack, rather than save the .max file directley to the asset folder I am exporting as a FBX file. Wondeful, except the Turbosmooth modifier is not being exported - the mesh just looks like the low poly version?
IN the 2010 FBX version of the exporter, under the Geometry tab, there is now a checkbox option to use the Turbosmooth. My guess is it isn't checked.
You could also just make a snapshot of the mesh, collapse it, reset Xform, collapse again and then export just the selected collapsed mesh.