See the Answer to number 1 5. I made a skin but when I put it in the game it shows up as a pink or gray blob You forgot to convert your .bmp back to indexed color. Objects, walls and floors do not need to be converted. For the most part objects go in the download folder unless otherwise indicated in the readme file for the download. So if the readme file says to put the file somewhere other than the downloads folder follow those directions instead of these.
Objects can go into sub folders in the downloads folder.
Occasionally you will find an object that has a file name longer than 31 characters. In these cases I have found that Namer is the best tool to use for this conversion. I put a bunch of new objects in my game and now my game is crashing. Take out the new objects and load them back in a few at a time testing your game in between. One or more of these objects is causing a conflict in the game and causing the crash.