Could someone please explain me how it is done?
I am working on some models and need to know it...

AH, I can help with this.

First, open up or make a simple model. Somthing like a square with a couple extruded edges on it. Next, select the them with body select and scroll down in the popup menu to UV Mapping>Direct (or) Force Segment. I haven't been able to tell a difference between D or FS yet. I really don't care.
Now, Right click in the screen that comes up, and under the Segment By option, choose perspective. When you get better, you can adjust the unwrap manually, but for now, lets keep with automatic function. Now that there are some fancy colors on the model, right click again and go to Continue>Projection normal.
Now you have a basic skin template. From here, you can move the polygons around to better suit your taste. This is why I had you open up a simple model. When you get higher polygon models, it gets really overwhelming real fast.
Once you have arranged the polys to where you want them, right click and go to create texture. Adjust the settings to where yuo want. The only thing I have to say about this is thta some computers can;t handle making a 2024xs2024 Texture. And tada, you now have a skin for your model. Export the model as a.3ds under the file>export menu, or go under window>outliner and make the texture external. From here, you can edit it as you wish, replace the.bmp of the original, and open up your model (if.3ds technique was used, please import back into wings afer replacing texture). It should be displaying by now. If not, post here and I will try to help. And remember, Wings has just as good a modeler/UVMap than any other program. Just look at what racer and I did. Specifically the pistol. Best work yet.

Hehehe... We got leet skillz.

That method works really well. I did this in my spare time last week . Wings3D is a great modeller. It's a shame there is no.dts exporter for it!

Thanx very much! Now ill have much more to do... So ill skin my models! :)

^ good job racer. Have you seen the hammerhead yet? Can't wait till I can manage to get the guts to see how insane that is going to be to unwrap. %) over 8000 frikin polygons. Damn, I am too good...

The thing I made some time ago. As u see its a tank in TT now, thanx to Nokta for it. Not finished yet, going to reskin it:

Cool! Are the rotors animated?

That is preety nice, I like it.

Unfrotunately, there is no animation for Mac (blender refuses to work on my laptop) so I cannot animate my things. I was thinking about making an objects pack for TT soon, though.

Thx ;)
No animation yet, I have started little time ago...

I was going to put animation for the tank
but T-90 make all the parts in one shape
so I can't put animation
T-90
make it 3 parts :)

Ok Nokta, ill do it ;)

@T-90:
What application do you use, and is it free? I'd like to give it a whirl myself. I use Windows XP, so will it work?

Heh, I use Wings 3D. And I have Windows XP. And it is free. ;)
Welcome to 3D modelling club ;) If u need, I have a good tutorial on wings 3d.
And also - to convert it to.dts nokta is probably usintg Milkshape3D.