Skins

Skins are, in the Grand Theft Auto games, textures that are placed over a blank three-dimensional skeleton used for clothing, vehicles, weapons, etc. All skins are stored inside of an IMG archive, and a TXD archive. Not all are the same. While most skins follow the same setup, others don't and usually require a DFF file in order to be scanned properly in the game. These include the ones for NPC characters in-game some of which are 128x128, 64x64, or anything under 256x256, and doesn't follow the design of the user skins. A

User Defined Skins
A feature in the PC versions of Grand Theft Auto III, and Grand Theft Auto: Vice City was letting the player create their own skins. These skins have a different layout in each game. All skins created by the user have to be a 24-bit Bitmap (bmp) file, and have to be 256 by 256 in size. The parts of a skin are mirrored symmetrically around the model so you would only have to create half of the body part. These are usually placed in the skins folder in the install directory (Program Files\Rockstar Games\GTAIII\skins), or wherever the games were installed. While skins in GTA III can be accessed at any time other then when the player has the Liberty State Penitentiary jumpsuit on, skins in GTA Vice City only work with the street outfit. Also all skins folders, and in the game there will always be the default player skin, along with a Read Me.txt file.

Texture Guides
Below are the designs in which the player must follow for the skin to come out properly.

External Link
Skin editor for GTA3 download from GTA Filefront.