NOTE: This guide will be updated to use the Arma 3 Tools once all relevant tools are released.

I've seen various guides on different stages of the texturing process, but I have not yet seen a single complete guide with all the steps laid out from start to finish with zero shortcuts taken. I've gotten a few requests for information on how I did my retextures, so I wrote this guide to allow complete novices to be able to get in on basic texturing. Using these exact methods, you’ll be able to achieve what you see in my Ghosthawk thread.

Set aside 2-4 hours to do this the first time because it takes time to get the hang of it.
  Credits
Before I begin I want to credit the people who made this possible: Bohemia Interactive for providing their proprietary tools to assist us. Stiltman for his texture configuration guide Surpher for his automated Photoshop script for converting normal maps to height and occlusion maps Surpher again for his dedication to helping people who have issues with their configs, etc. Topas for his BLUFOR Infantry template Saul for his BLUFOR, OPFOR, and INDEP infantry height, cavity, and occlusion map templates Right from the start you'll need Bohemia Interactive's official mod tools (40mB). Install everything included there even if you don't think you'll be using certain tools. Texturing is often the gateway to more advanced mod creation and while you may not think you'll get into that now, something might change your mind later and you'll be glad to already have the tools installed.

Note: The Arma2Work folder will be put in a virtual hard drive called P:\ in My Computer. It is essential to almost all modding that you have this available.

I'll outline my actions briefly and then run through the procedure from start to finish unlike most other guides. Don't worry if you don't understand the terms in the following list, it'll be explained after. Also, to prevent readers from being overwhelmed by the amount of information, I have put each section in spoilers so they can open them as needed.
  Actions
1. Create new blank mission in Arma 3.
2. Install BI Tools, Eliteness, the DePBO.Dll, and PAA plug-in for image editor.
3. Use Eliteness to extract files from the pbo of choice.
4. Access the texture file that you want and open it in your image editor of choice.
5. Import a downloaded texture or custom texture and use overlaying techniques to fit it over the original skin.
6. Export the final texture design as a TGA file, open it in TexView2, and save it as a PAA file.
7. Test that the texture actually works by placing the item in the editor and using setObjectTexture script command.
8. Copy the textures to my addon build folder and edit the config to allow it to be available in the editor.
9. Use BinPBO to pack the data into a pbo file. That pbo will get installed like any mod you download from online.
    Preparation    
  Texture Editing  
  In-game Texture Test  
  Configuration Creation  
  PBO (addon binarization)  

I hope you have learned enough to get started on your own mods. If there are any questions, you may definitely post them in this thread. I expect there may be questions about the configuration, so post those here as well and I will contact Stiltman to guide us together on that topic.

Enjoy!