well first thing you need to know is it takes a lot of time to do a good one and only real skins can be submitted for use in the game,not made up ones.
ok i take it that you have read the sticky above about submitting skins which tells you how to get the skin at the begining.
What you need to use is any program that uses layers,photo shop,paint shop,gimp,anything like that.
Always work in layers and remember to save quite a lot,
good luck and have fun