I tested it and it worked fine, except that it was very small. I assumed that the glow thing I heard about would make it incompatible with SFC 2, just as illumination makes SFC2 models incompatible with SFC 1.
You really need to find a copy of SFC 1 and OP. They are great games, and from what I hear much better than SFC 3.
No, the glow is simply ignored by SFC 2 as it never looks for it (the glow information is stored in a .gf file, the model cache in a .x file) and the *_VL.bmp, *_TI.bmp, and *_BS.bmp files aren't read by the mesh, so not read by the game.
The reason that you can't use a SFC 2 mesh in SFC 1 on the other hand is because the illumination texture calls are hardcoded in the .MOD file, which is read by the game and because it can't handle them, crashes to desktop. But a SFC 1 or SFC 2 mesh can be flown in SFC 3.. you'll just have no glow or illumination for a SFC 1 mesh, and no glow for an SFC 2. And the hardpointing will be off..