Here's an '06 quick-guide (I stopped using '04 before I started reskinning, so if you're an '04 user you'll need to wait for some kind '04 reskinner to explain in more detail).
Find the original file in CMP, and clone it to give it a new KUID.
Open it for edit in explorer, and then you can change the image files. These are not always .bmp files - some are .tga files and require a more specialist program than MS Paint to open.
You'll need to experiment a bit to see what looks right.
When finished, close all files and commit them in CMP.
Note you cannot reskin Auran's objects in this mannor, and only PS templates can be opened in PS.
EDIT: I notice you're an '04 user, so this won't help you. Sorry.