thread. I recently reformatted my computer so unfortunately I am unable to provide images, but the procedure is not too difficult. It has also been a long while since I have created any new models, so my instructions may or may not be precise and some mild experimenting on your side may be required. 
A bit of what I can remember is adding an Unwrap UVW modifier, and under "Parameters" clicking the large Edit button (below this section you should see some other buttons like PlanarMap and tickable axis boxes; I believe it should be set on Z Axis)
and make sure the UVWs are set properly. If my memory is correct, the skeleton should seem flat with the general shape as if you are looking at the model from the Top viewpoint. It may appear messy but as long as it coincides with the Top viewpoint, you're good to go.
Once you save/apply the UVWs, go to Utilities > Texporter (find it here:
), set the .dds size (128x128, 256x256, 512x512) and save it on your computer. Then you access Photoshop/Gimp, open the saved file, clean up the alpha layer if needed and work in your texture. When it's completed, save the file again. Once you're back in 3DsMax simply apply the material (see the .c3 guide or Google how to apply material) and pray. If any of the areas of your texture are misaligned on your model you can go back to Unwrap UVW modifier -> Parameters -> Edit tab and move around the vertices until your texture lines up properly.Once it looks good, rename your .dds file it to align with your .c3 file (xx0x39.dds) and place it in c3 -> texture of your CO folder.
I hope my memory served me correctly and that everything works well. If you get any errors or have any questions, I'll try to satisfy your query.
