As you have found, the skins are held as jpeg's, so you can change the "paintwork", in theory that is all you can do.

In reality you can change much more, however, these changes are only "local" to your PC, lights, tyres and interiors and contained in certain dds files, contained within the DDS folder, I would suggest visting both the addons forum and the skinning forum on the LFS forum site for much, much more info.

As for skinning progs, PS is about the best you can get, I would suggest using the "master skinerz" (i think thats how it's spelt) paintkits, they have everything on layers, again, the skinning forum is a very good resource for finding various things out.

Mark (Gopher our resident skinner) may be able to shed a bit more light on it 

P.S. lets have a look at those skins you have done then 

Print screen in LFS, then paste into PS, save the file and attach here, or attach the jpg of the actual skin file.

or just use the main website:

http://www.master-skinnerz.com/

 

Certainly not too shabby for a first attempt, nice one 

Good work 
You might have noticed that each face of the car doesn't match up exactly to the in-game car... there is stretching. Check these scaling factors I calculated to account for the stretching http://www.burton3.vispa.com/stretching.pdf