David I know you hate reading thru topics to find the entire tut so I am bringing it to you.
(From AJ COLLINS)
How To:
1. Find the texture file (TXD/NFT) you wish to edit.
2. Change the file extension to NIF.
3. Double click the file to open it up in NIFTools.
4. Right click on the texture in the list, go to Texture and then click Export.
5. Open up the exported TGA file in a image editor that can edit TGA files. For this tutorial, I'm using Paint.NET.
6. Edit the texture. When done, save it. If asked for settings, keep the default ones and click OK.
7. In NIFTools, right click on the texture again, go to Texture and then click Embed.
8. When you imported your new texture, NIFTools may have created a new line called "NiPixelData". Right click on it, go to Block and then click on Remove.
9. Go to File > Save As or just hit Ctrl + S and save it.
10. Rename the file back to the NFT extension.