Well what I used to edit was Adobe Photoshop CS3 worked pretty good for me.
Ok so say you want to edit the lv255 sword you gotta edit many places heres the main folders you might need to edit the weapon in:
Client\c3\weapon= 420270.dds
Here a quick edit I made Yes its really ugly I know
Client\c3\effect\weapon\420270= 1.dds, 6.dds
Heres the 1.dds and 6.dds you need to edit as well
1.dds, yes the 420270 looks the same cause well its suppose to be

?
6.dds