Most mods, except the incredibly original ones, are helped with a supply of pictures. Not necessarily to always clone onto the texture, but to draw vision, inspiration, and guidance from. For example, I am making a mod based on Blackbeard, the pirate. The more pictures I find of him, the better. It will help me visualize what I am going to make him look like, what clothes he will wear, how is hair looks. Pictures are the flashlight that show you and your mod the way ahead to success.

All textures come or can come in three different sizes, 64x128, 128x256, and 256x512.
The first, 64x128, is the lowest detail a body texture will go, unless you want to drop to 32x64, for some horrible reason. This resolution is pixely, undetailed, and hard to texture your full imagination.
Advantages: Faster to mod, less lag when many units on screen.
Disadvantages: Undetailed, pixely, hard to mod.
BOTTOM LINE: Use this only if necessary, or you want to make an undetailed, quickie mod which is not meant to be eye-candy.

The next resolution, 128x256, is the medium of the three. It allows more detail than 64x128 since it is bigger, but cannot support as much as 256x512. This is the size most modders use for a quick, detailed-yet-simple mod which can still be eye-pleasing.
Advantages: The medium of the three sizes, allows more detail than 64x128, less lag than 256x512.
Disadvantages: Not as detailed as 256x512, may be slightly limiting or still slightly pixely.
BOTTOM LINE: Use this if you are making an average-detail mod, not as intricate as 256x512 and not as pixely as 64x128.

The last resolution, 256x512, is the one I use the most. Being the biggest, it supports the most detail. It takes the longest to mod, but is the most pleasing to the eye when everything is over.
Advantages: Heavy detail support, open for immense creativity.
Disadvantages: Takes longer to mod, might cause lag if many 256x512 units are on screen.
BOTTOM LINE: Use this resolution if you are in the mood for creating a detailed, eye-candy mod, which may be more difficult to make.

~First, determine what each part of the texture is, and if you are lost, use Waveslave's Guide to Exploring a Texture. Now, apply single block colors to the texture in each part you are modding. For Example, if I want to make Jason have a green shirt, I will color all of Jason's upper torso region a shade of green. Then, if I want to make him have green sleeves too, I will color the arm regions block green too, extending to the wrists. I have decided that I will leave Jason with just a longsleeve green shirt on, and the rest of his texture the same as before, so let's move on.

Note: Always keep AoM running while you are modding, and always check your mod while making it. Don't mod blindly.

Base Green

~Now, say I want Jason to wear a vest. I am going to paint a black region all over the back of the upper torso, and on the sides of the front upper torso. Also, I am going to add a little bit to the upper arm on the left side of the texture. After

Note: You will not get everything exactly correct the first time. I had to go back and fix the vest three times on the front upper torso and arm before it looked good.

Undetailed Vest Added

~This is where you take the blockish texture, and add some detail to it. For now, I am making things flat, and I will get back to it later. Add details to places where you think need them. Use the paint tool, and don't try to add depth or shadows yet. That is next.

Added Details

~This is one of the most important steps. I will explain it with PSP8, but it is possible in most all paint programs, except MS Paint.

First, take the "soften" tool, or blur tool, (I have it at Size 5 Hardness 0) and soften most of the lines on the mod. Contrary to some belief, black lines or dark lines do not make the mod better, they make it more flat.

Note: The level of soften varies in different places. For example, I softened the cut on the shirt a lot, and I barely softened the buttons on the vest

Softened Lines

Next, take the "Lighten/Darken" tool, not the "Burn/Dodge" tool, and get a size about Size 47 Hardness 0. Now, just lighten and darken around the texture, making it look like different parts are different colors and is dirty. Make it dark in some places and light in others, like sun is falling in different places.

Note: Left-Click to Lighten, Right Click to Darken

Lighten/Darken Texture

Lastly, take the Dodge/Burn tool and choose the "Sponge Round" shape. Use around Size 150. Do the same as Lighten/Darken, left-clicking to dodge, right to burn around the texture. Make it even, and make it look dirty and worn, unless your aim is to make the clothes new looking, which is kinda flat.

Finalized Texture

This is how the final mod looks. See how the shading makes it look 3D?

Finished Sample Mod

Follow these basic steps, and I guarantee you will texture well. Everyone has there way of modding, so maybe you want to use your own. This is mine, and I'm sharing it with you so that you too can learn to texture...and texture well!