I use the exact same basic method as crowbaby for all my skins, great tips.
A few things I do different though.
1. Areas that have a highlight next to a panel line. Draw the panel line in black as normal and add a highlight line in white next to it. Then change opacticity to get the desired impact, much easier IMHO than drawing in highlights by hand after the panel lines.
2. Really! work in 1024x1024. Different programs have different ways of reducing the image size to get acceptable detail. In PSP use Bilinear Resampling to reduce the image size to get good results.
3. Layers. In order bottom to top: Paint, Markings, Panel lines, Rivets, Other lines, Weathering, Dirt1, Dirt2
4. Paint is just that. Pristine unhighlighted block colour showing the base paint layer and blended transitions between colours.
5. I put the markings seperate because I can then paint behind them without messing them up.
6. I use 3 (at least, the sea hurricane had 4) layers for panel lines/rivets etc. I put things like the lines on the rudder and aelirons on a seperate layer. I use a black line, width 2 anti-aliased for ALL panel lines (in 1024x1024 texture size), then I adjust the opacitity to get the right sort of look. The reason I use so many layers for these is so I can adjust the darkness of any group I want easily.
7. weathering is stuff like chipped paint, wear and tear rather than dirt. Usually found on leading edges and anything that sticks out.
8. Dirt, I use 2 (again at least) layers for dirt. Usually one for each colour of dirt. Rust is a different colour to mud which is different to exhaust which is different to gun blast etc etc.
9. I trace panel lines etc in exactly the same way as crowbaby, I just increase image size to 1024x1024 first.
Anyway. There's no 'right' way of doing this. I hope some of these help some people.
BTW, can someone tell me if Photoshop will open PSP .psp files? and if anyone wants them I have 1024x1024 Hurricane IIc and F4F panel lines and rivets in layers. Send me an email and I'll send them to you. These are the things I really want someone to host on the web rather than full skins. the F4F rivets and panel lines took me about 8 hours! Bloody thing.
Gatso