First off, if you simply zoom out and view it from a reasonable distance I doubt you'll notice the pinching. What is the scale of this object? Secondly, a really simple and quick trick you can try, slide the red edges out to where the green lines are:
There are some differences in the subdivision algorithm of the various applications; The example posted by BARDLER should be Softimage or Modo subdivision, that gives you a perfect circle from a square, unlike the Max one that operates differently. This said, just understand how your app behave and you are ok :)
What do you mean engravings? Like letters? If that's your question, I'd say you can use floating geometry on there. Either that, or do it in PS, run it trhough xnormal PS plugin (or nvidia nm filter) and put it on top of your baked result as an overlay.
Yeah, I'm also interested how others approach this. Obviously, it would be really tedious if you model those on the same mesh. And it would be inefficient if you bring it to zbrush or mud and sculpt. Has anyone tried modeling those lines using the floating geo approach?
CastratedWeasel: You could start from a cylinder grab the top face then delete most of it to just be left with the top part then drag the edges down to create a oval then just make the indents as you normally would. Or just start with a plane and move some verts around.