yes it is compatible.. am currently using ISE 6.2 and am using modemsim 6.0 SE, its very good.. wonderful.. am using i dunt think there is any problem.. like wot aravind said.. jes import the xilinxs FPGA library into modelsim lib it wud surely work fine without any problem.. u might find it difficult to get ASIC library.. give it a shot
I don't have modelsim 5.7 SE I have XE but I doubt that the XE library will include smartmodels?
anyhow I will try importing from XE and will check if the smart models are there.