ok I guess ill just answer my own crap. after a day of googling and testing I finally figured it out.
Skinning isn't as hard as I thought it would be. You just need to be familiar with dothalo, but it is a pain when waiting for that big ass shared.map to ftp to your xbox. what you need is dothalo and a dds converter.
http://eliteforce2.filefront.com/file/DDS_Converter;29412open up your shared.map in dothalo and click on the bitmap tag
scroll down and click on the skin that you want to mod. ex. ...worthog_standard
open up the raw data editor and select Extract Bitmap and choose a directory.
open with ms windows picture viewer or any other picture viewer that can read .dds images.
If your using ms pic viewer right click on image and choose edit.
It should open in ms paint.
either edit the skin in paint or copy it over to photoshop or any other image editing program.
save as a Bitmap image.
open the dds converter and open open your new bitmap as the input and choose any output directory you want.
convert to a *.dss and close the program.
go back to dothalo-raw data editor and choose inject bitmap.
choose your new skin (.dds not bitmap) and press ok
save changes, fix encryption, and close map.
its that easy.
*Before you test out your skin make sure to clear your xbox cache or your new skins will not show up.*
!Happy skinning!
SMDFlare.